Benefit Programs in the Major Airline Industry

The Human imagery topic that we selected is to analyze the make course of instructions of four major airlines. Benefits are chief(prenominal) to employees as well as their families, and can be a in good send recruiting tool. Benefits also play a major role in managerial decisions and wise bow out in choices can scram a long encounter on the quality of feel. Some characteristics of a sound benefits course of study are, they essential accept clear specific objectives, they must(prenominal) allow for employee input, they must be responsive to societal and environmental change, provide for flexibility, and there must be clear communication with employees. one(a) of the main challenges that companies face are the overall costs of these benefit programs to the companies themselves, as well as staying competitory in hopes to attract proud quality employees. Almost 40% or $14,678 per employee is dog-tired on benefit programs per year. American Airlines like more othe r airlines are facing umpteen challenges in the HR area of benefits and incentives. American Airlines as we all know is one of the leading airlines in to sidereal days airline industry. This status reflects upon Americans benefit program.American Airlines realizes that it must stay belligerent in this area to en sure as shooting that they get the most qualified employees. American Airlines tosss many benefits and incentives for their employees with hopes to attract the best. Many of the benefits are standard and required by law such as social security, un booking, workers compensation, and leaves without buckle under. What really must be paid attention too are the benefits and incentives that are offered in access to the ones required by law. These benefits and incentives are what attract individuals to work for American instead than a nonher airline.Benefits such as a 401 K Super Saver, which allows up to an ample 20% tax provision, a computer memory purchase plan, a credi t rating union which could help one to buy a house, and in-person emergency coupled with hurl pay, just to name a few. American Airlines also recognizes ten major holidays for which employees do not have to work, in time they til now get paid. Most of these are benefits that competing airlines offer, but one benefit stands out. American Airlines pass travel program is a benefit that many do not tend to overlook. American does not offer salve stand-by tickets to its employees until they have been with the airline for 10 years.What they do offer are extra discounted rates. This is the major weakness in their strategy to attract employees with benefits. American offers a very long list of benefits and incentives but this is one that is left out. I believe that American Airlines is making a big mistake by not allowing employees to take flight for shrive. To become more good American Airlines should loan this benefit to its list so that it can be competitive with the other air lines. American has many strengths which hold benefits that the other airlines do not offer such as a 401 K plans of up to 20%, and a credit union.Although at the same time it has a very extended weakness, which is their travel plan that only offers its employees discounted rates, instead of free airfare. American Airlines must feel that it does not have to offer this benefit to attract effectiveness workers, because it has so many other benefits to offer. Continental Airlines prides itself on offering a wide variety of benefits to their employees. The eligibility for these benefits varies according to the length of time an employee has worked for the company, and the position that they hold.One challenge that Continental Airlines face is the cost of providing these benefits to their employees. They have to make sure that they are pecuniaryly subject to provide these benefit programs, while still attracting high quality employees to their company. Some of these benefits includ e travel passes, profit sharing, stock purchase plans, retirement plans, 401(k) savings plan, vacation and sick pay, an expense reimbursement plan, aesculapian exam and alveolar restitution, vision insurance, life insurance, and accident insurance.Although Continental employees and their families are subject to travel at reduced rates they are not qualified to fly completely for free, which whitethorn be considered unfavorable by well-nigh employees. Continental employees are also able to share in the financial growth of the company by purchasing Continental stock at a discounted rate. Continental also provides a fully funded retirement plan, which employees waistcoat in after five years of service. It also provides the 401(k) savings plan, which is a great way for employees to save for retirement. The employees can save up to 19% of their salary before taxes are withheld.Continental also matches a slew of their employees contributions to the 401(k) savings plan. Full and part time employees of Continental are able to take advantage of paid vacations, as well as the sick leave policy which gives employees time off from work, with pay, when they are ill or unable to work. Continental also provides immediate accident insurance upon avocation for all of their employees. Continental does provide many benefits upon the initial employment of their employees however, close to benefit plans are not available until seven months after they have been employed.These include medical and dental insurance, vision insurance, long-term disability plan, and life insurance. Most of the plans are pre-tax, which allows employee tax savings. For every employee, there is a benefits program that best suits him or her. Younger employees who do not have the province of families may not be looking for the same benefits as an senior employee with a family. Continental requirements to realize these differences in employees, in smart set to provide a benefit program that wi ll attract the high quality employees they are looking for. southwestern unify States Airlines is currently the fastest ontogenesis airline in the business. Over the yesteryear 10 years southwestern joined States have grown its revenues by 388% and its net income by 1,490%. Some of the social occasions that have helped southwestern to grow so quickly are their personnel. They have erect ways to hire employees that have out-performed every major airline for the past three years. Their hiring tactics can be accredited to a sanguine business network, in-depth research, a good job data home, strong recruiting staff, and an outstanding benefits program. sou-west offers its employees a very competitive benefits program.Their program offers passes and travel privileges, medical insurance, dental insurance, life insurance, long term disability insurance, sick leave, vacation and holiday pay, profit-sharing, 401 (k) plan, stock purchase plan, and a employee assistance plan. One of th e special benefits to works at Southwest is transient for free on Southwest and flying free or at a reduced rate on other carriers with whom Southwest has a pass agreement. Effective from the first day of employment, all employees, their spouses, dependant children, and parents of employees all have unlimited travel privileges on Southwest.An employee may view this as a huge benefit when they root they would like to travel. On the downside of this part of the benefit program, Southwest does not fly everywhere in the get together States, and that may pose a worry for an employee that would like to travel somewhere that Southwest does not offer service. other benefit is Southwests medical, dental, and life insurance plans. Employees may contract to incorporate their families with their medical and dental plans in order to save the employee money.The medical and dental plans will cover 100% of the employees medical and dental gets, as well as their families needs, with minimal c ost to the employee. For the life insurance plan, employees may choose coverage up to 4 times their base annual income in order to protect their family. The long-term disability program is set up in case an employee becomes disabled and can no longer work. Funds are still paid to the family in order to compensate for the employees inability to work due to disability. Depending on employment classifications, employees are able to gather time off for individual(prenominal) ailment and vacations.Employees celebrate several paid holidays throughout the calendar year, based on their employment classification. Southwest offers its employees a 401-(k) plan. The plan is designed to help employees plan for their retirement. Eligible employees may contribute up to 15% of their pay to the plan on a pre-tax basis. Employees direct their investments and may borrow against their line balance. Employees are the basic fiber of Southwest Airlines, so they feel that employees should be able to sha re in the success of the company by invest in Southwest Airlines Co. tock through payroll reductions.Employees pay only 90% of the market value for the stock, and broker commissions are paid for by Southwest. Southwest cares very much for their employees well being. They offer their employees an assistance plan that helps when employees need it most. The plan provides professional assistance for employees and their families in order to solve personal difficultys that may arise that would cause their personal lives and job performance to suffer. Southwest Airlines realizes that without its employees the company would cease to work.Southwest offers these benefits to help keep their employees happy and provided for and in return their employees strive to keep Southwest on top. coupled Airlines is a true global airline that has over 140 stations in more than 30 countries around the world. United prides itself on being a company where opportunity and advancement are determined solely on merit and individual achievement. United supposedly values diversity not only because it is the correct thing to do, but because it is the right business thing to do. Uniteds stated position is that all employees should be case-hardened with respect and dignity.The policy not only extends to employees, but to Uniteds customers, vendors, and independent contractors as well. Some of the benefits that United offers to its employees are company-paid medical, dental, life and long-term disability insurance, pension plan, paid vacations, travel passes, stock purchase plan, 401(k) plan, and credit union. Going against the companys policy, United Airlines has been in litigation with the metropolis of San Francisco concerning the Equal Benefits Law. Last year United Airlines supposedly negotiated a two-year exemption from the law in order to renew a 25-year lease with the San Francisco Airport.After opposing letters from the National Writers Union (NWU) United Airlines has joined with Ai r Transportation Association (ATA) in a drive against the city of San Francisco challenging the command. United claimed they never made an agreement with San Francisco and has not yet made a commitment to providing domestic partner benefits. The ordinance states that any entity that contracts with the city of San Francisco must provide equal benefits to its employees registered domestic partners that it provides to marry spouses.Out of its 94,000 hired employees, United currently has approximately 10,000 lesbian, gay, bisexual, and transgender employees. We believe that United is not very connected to diversity. It is obvious to see that United is hard to limit their benefit packages to those individuals that are not registered domestic partners. Some states still do not recognize domestic partners as legal spinal column marriages, and as a result, these individuals cannot receive equal benefits. Uniteds problem is that almost 11% of its total workforce is comprised of lesbia ns, gays, bisexuals, or transgenders.If United is committed to having diverse employees they should also be diverse in their benefit coverage. United should recognize that they have a diverse background and these select individuals need to be given equal benefits regardless of the added costs. The text mentions that part of providing a sound benefit package is allowing employees to given input into the benefit system. Having employees recruit in designing benefits programs would help ensure that management is moving in the direction of satisfying employee wants.To meet the many changes occurring in society, management must reflect these changes in the employee benefits programs. The fact is that benefit plans sometimes provide lilliputian advantage to employees. Even though United might be trying to save money, their treatment towards domestic partners are limiting the organizations ability to attract and retain quality employees. Some of the most effective policies and strategies for dealing with benefit programs are encompassed within each of the four airlines benefit programs offered.There are several benefits that are required by law, which include Social Security, Unemployment, Workers Compensation, and Leaves without Pay. Overall, American Airlines seemed to offer the most versatile benefits program. Although other programs offered homogeneous benefits, we found that American Airlines offered the most conservative program. For example, United Airlines, and Southwest Airlines some(prenominal) offer free flights to all employees as well as their families, which may be more appealing to a young employee without a family.On the downside, we discovered that Southwest Airlines has a limited flight area, which minimizes their costs when employees take advantage of these programs, and allows them to offer these strategic benefits. We feel that American and Continental Airlines are overlooking an important strategic hiring strategy, by not offering free fligh ts to all their employees, since cost of flights are fixed. For example, a flight that is only at 85% capacity will fly for the same price as a flight that is at 100% capacity.Continental Airlines, has a competitive benefits program as well, but it lacks the flight area which both United and American Airlines offer. We felt that American and United Airlines offered the best benefit programs, although American does not offer free flights from day one of employment, they offer many other compelling incentives such as, personal emergency assistance, vacation purchasing programs, credit union assistance, as well as flight discounts for their employees.