United Backs Off of Bonus Plan
/United announced moving to a lottery system for employee bonuses, but backlash caused management to rethink the plan. President Scott Kirby had distributed a memo describing the new process:
"As we look to continue improving, we took a step back and decided to replace the quarterly operational bonus and perfect attendance programs with an exciting new rewards program called 'core4 Score Rewards.' "
The new program would include cash and other prizes and one quarterly prize of $100,000, which would be given to a random, eligible employee. Following the criticism, a spokesperson tried to clarify:
"We announced a new internal program based on United meeting certain operational and dependability metrics as a way of offering meaningful rewards to our employees. We believe that this new program will build excitement and a sense of accomplishment as we continue to set all-time operational records that result in an experience that our customers value."
Employee comments were harsh:
"Why should I be happy watching another employee get rewarded for my hard work? How would you feel if Oscar (United CEO Oscar Munoz) played roulette with your incentive package and it went to another vice president through a lottery drawing."
"This is truly disappointing. The current program 'costs' the company approximately $150 per 75,000 employees per quarter, totaling over $11 million. This new 'improved' program that we are supposed to be so excited about will cost the company $3.5 million per quarter. This saves the company about $8 million per quarter. Does Willis Tower really think the average front-line employee is stupid?"
In a second memo three days later, Kirby announced a pause on the program, saying they would "consider the right way to move ahead" and "will be reaching out to work groups across the company, and the changes we make will better reflect your feedback."
Discussion:
- What went wrong? Was it the bonus/lottery plan, the way it was announced, both, or something else?
- One employee commented, "Wow. I thought our morale was already as low as it could go, but I guess that was naive thinking on my part. I'm finally starting to understand that there will always be room for management to make me feel even less appreciated than I already do. How many times must they be taught, that if the employees aren't happy, no one is happy." What should the company leaders do now?
- The memos and employee comments were on an internal United system. What are the ethics of forwarding internal communications to the media?
