How to Keep Your Employees Happy

March 10, 2015 — Leave a comment

By Bill Fotsch

“Happiness” is a tricky concept, particularly at work. Some people seem to be happy most of the time. Others are congenital grouches. Still, there’s no doubt that some workplaces feel like a great place to work—they feed people’s happiness. Others seem to make people gloomy or stressed out.

What accounts for the difference? Think about the last airplane trip you took. The staff at some airlines—well, you just wouldn’t describe them as happy. At best they’re merely professional. At worst, they can be cold, impatient, or downright surly.

And then there’s Southwest Airlines. Veteran flyers know that most SWA employees usually have grins on their faces. They laugh a lot. They’re pleasant to be around, which suggests they’re pretty happy.

I don’t mean to be too mechanistic about happiness, but surely management has something to do with it. Most of the other big airlines have gone through bankruptcy. Their labor relations have often been contentious. People have been laid off or furloughed with regularity.

Southwest, by contrast, has been consistently profitable since its founding in 1967. No bankruptcy. No layoffs. Sure, it has its challenges because of its rapid growth. Even so, Southwest employees have a level of job security that is the envy of their colleagues in other airlines. They have had profit sharing for years, and most of them own stock in the airline. When I was working with them to apply open-book principles a few years ago, I was impressed with how they naturally collaborate to improve results.

One episode has always stuck in my mind. It was years ago, when the airline industry was going through a particularly tough time.  I happened to be in Dallas that morning, and heard a report on the local news that SWA was the only airline not making any layoff announcements. 

I happened to be flying on SWA that morning. As I was checking in, I had the following exchange with the gate agent:

Me: Boy, you guys got some great press this morning.

Her: Yes, we are all very proud.

Me: Sure, the rest of the industry is laying people off, but not Southwest.

Her: Right, but do you want to know why we are not laying anyone off?

Me: Absolutely. I’ve been a SWA fan, investor and customer for years. Tell me.

Her: Well, we knew eventually a rainy day would come, so we have been saving money. All the other airlines are loaded up in debt and consequently they have no choice. We have over a billion in cash. So we have lots of options. Would you like to hear about the new markets we’re going to enter?

Wow, I thought.  She is checking me in, yet she sounds brighter than a lot of CEOs. That’s the power of open-book management.

Oh, yes. She looked pretty happy, too.

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