LinkedIn Facebook Twitter Email Contact Card
Compensation in Context Newsletter
VERITAS EXECUTIVE COMPENSATION CONSULTANTS
San Francisco
    Chicago
    New York
    Washington D.C
415-618-6060
www.veritasecc.com

United Airlines Shelves Lottery Bonus Program After Employee Backlash


March 19, 2018 | CNBC


Shortly after we published our corporate Darwin Awards a few days ago, United Airlines scrapped their ill-considered lottery bonus program. Here is a brief summary from CNBC of what happened, plus an excellent op-ed from Forbes:

  • United Airlines' executives had introduced a plan to replace automatic bonuses with a lottery.
  • United's president said executives "misjudged" how employees would receive the plan.
  • Under the new plan, one employee would have won a drawing for a $100,000 prize each quarter.
A backlash from employees prompted United Airlines to shelve a quarterly bonus lottery plan that made it more difficult for staff to earn rewards.
"Our intention was to introduce a better, more exciting program, but we misjudged how these changes would be received by many of you," United's president, Scott Kirby, said in a note to employees.
United had been giving employees bonuses each quarter when they met certain company performance metrics. But they changed it for a new lottery program in which qualifying employees could enter to win prizes. For example, a single employee could win $100,000, while other prizes included vacations and cash rewards, according to the Chicago Business Journal, citing a company memo.
The change to the bonus program comes as United and other airlines are facing higher fuel and other costs but are also adding service.
Now United is "pressing the pause button" on the program as it reviews employee feedback, Kirby said.

United Airlines - We Need To Talk. And It's Not Me, It's You

FORBES | Cameron Welter 


United, we’ve been together for five years now, but we need to talk.
I want to start off by saying that this isn’t the end for us, but I have been having some serious concerns about our relationship lately.
I still remember when we first put a “status” on our relationship, and you asked me to be a United 1K member. Those were the days, weren’t they? This isn’t to say we haven’t had good times lately—in just the last two years we’ve flown 300,000 miles together.
But I am worried…
You’ll remember I mentioned this for the first time four years ago. I was concerned about the way you were treating people. I saw my friends, and they were so happy with Southwest, Delta and JetBlue, and I was jealous. In your defense, you showed that you cared and took some serious steps to prove to me just how much I meant to you as a frequent flier.
These days, I almost always have WiFi when we’re together, so I can be connected at 30,000 feet. I love the upgrades and the option to take a later flight, in exchange for a travel voucher. Heck, I haven’t had to pay for a vacation in years thanks to your rewards program. There are so many things I love about what we have together, but there are a few things you need to work on.
The last few months have been rocky, to say the least. I don’t think I need to bring up the YouTube video, but honestly, how could we forget? That could have been me—just another business traveler trying to get to my destination.
And then the news about that woman’s violin. We board your planes and hand our valuables to you every week. Every flight of yours contains something of value to your passengers—be it ourselves, our pets, our luggage or our instruments. Why was that situation handled so poorly?
This last one, however, really got to me.
I was shocked when I read how you announced to your employees (via a companywide memo!) that you were eliminating bonuses in favor of a lottery system. I did see that you’ve put the policy on hold, based on employees’ negative reactions to the system. But I’m curious to know—why did you think it was a good idea in the first place?
These are the people that keep your organization running. The people that go above and beyond to help me and your countless other frequent fliers get home after a long day of business travel. Was an internal company memo really the best way to inform people you’re changing performance bonuses?
And it isn’t just how you told them that’s got me scratching my chin—it’s that you thought a lottery system would be welcomed with open arms. Are you truly that out of touch? I could have told you how this would have gone over, and it wouldn’t have gone well.
I still envision a future for us. Nothing would make me prouder than to be a Global Services member one day, but I really need some things from you in the meantime…
Seek stories, not data.
When a vast majority of the company comes out strongly opposed to a new change, so much so that there is “palpable tension” on the floor, there is clearly a disconnect between management and employees—a gap between intentions and execution. Tell me, how did that sort of disconnect come to be? Do your senior leaders know what’s on the minds of the folks that actually interact with your customers?
I need you to take a walk in the shoes of your employees. Learn where they’re coming from, what their roles are like, what challenges they’re facing and what they want from you, as United leaders. When you have one bad customer experience, you can chalk it up to a single employee. What you have, United, is a systemic issue that makes your employees feel they need to act this way.
Give employees a seat at the table.
If you don’t understand your employees, you certainly can’t understand what reward system will make them feel valued and appreciated. You need to get out from behind your desks and spend time on the ground with the people issuing tickets, managing your contact centers and flying your planes. Who are these people? What gets them out of bed each morning? What do they want from United in return for their service?
Not too long ago, one of my clients was having a similar trust issue. One of the ways this showed up was that people weren’t allowed to backfill employees who left the company (a role which was already in their budget), without going through 18 approval processes and getting sign-off from half a world away. They were being asked to act like owners, but couldn’t make decisions about their own team.
The global HR policy designed to encourage employees to innovate and do more with less had backfired. It also contributed to a disconnect between senior leaders and the people actually running the day-to-day operations.
Only when this unintended outcome was brought to light could the policy be challenged and changed. Do you want to know how those executives discovered unintended outcomes? They were intentional about learning how people felt. They listened to their employees. And when they heard how their well-intentional policies actually impacted people, they took action.
Focus on your culture.
This may be the piece of the puzzle you’re truly missing. Ask yourself: what kind of culture am I creating by not getting buy-in for what, at first glance, seems to be a pay cut? Moreover, what behaviors am I driving by announcing this new system via a company-wide email?
You need to reestablish trust with your employees. Your employees need to feel valued, respected and proud to work for United. Take small steps to identify where the pain points lie and what quick fixes could be made to improve the lives of your people—from pilots to plane mechanics. Even small changes that show you’re listening can rally the support of the organization.
Again, United, remember that I have options. While I would love to continue this relationship, there are other airlines, like Delta or American, that would gladly accept my loyalty.
I don’t want to end things this way, so please make some changes.
Veritas Executive Compensation Consultants, ("Veritas") is a truly independent executive compensation consulting firm.

We are independently owned, and have no entangling relationships that may create potential conflict of interest scenarios, or may attract the unwanted scrutiny of regulators, shareholders, the media, or create public outcry. Veritas goes above and beyond to provide unbiased executive compensation counsel. Since we are independently owned, we do our job with utmost objectivity - without any entangling business relationships.

Following stringent best practice guidelines, Veritas works directly with boards and compensation committees, while maintaining outstanding levels of appropriate communication with senior management. Veritas promises no compromises in presenting the innovative solutions at your command in the complicated arena of executive compensation.

We deliver the advice that you need to hear, with unprecedented levels of responsive client service and attention.

Visit us online at www.veritasecc.com, or contact our CEO Frank Glassner personally via phone at (415) 618-6060, or via email at fglassner@veritasecc.com. He'll gladly answer any questions you might have.

For your convenience, please click here for Mr. Glassner's contact data, and click here for his bio.
VERITAS EXECUTIVE COMPENSATION CONSULTANTS
powered by emma
Subscribe to our email list.