United Airlines swaps out employee bonuses with lottery

Posted March 09, 2018

The "core4 Score Rewards", which was referenced in the memo was introduced to make the United employees a bit caring when they carried out their duties daily in the airlines.

United Airlines is rethinking a plan to replace its modest monthly bonuses with a lottery system that would have offered large rewards to a few workers at random.

Under the system proposed by Kirby, more than 1,300 workers would win cash prizes of as much as $100,000. Over 1,000 employees would win these prizes per quarter if certain operational criteria were met, according to the initial announcement sent to employees and obtained by ABC News.

Backlash from United employees was swift and fierce. Other employees stated that the lottery system does not appeal to them and could thus opt out of participating simply by not doing a good job.

Seth Kaplan, managing partner of Airline Weekly, said he couldn't recall another case where an airline swapped regular cash bonuses for a lottery system, "which I think is the problem", he said. The company has been under pressure to keep shareholders happy as budget airlines have been taking away market share.

Chicago Business Journal, which first reported the change late Friday, noted that Kirby's memo had largely failed to create the "caring" attitude the company has been trying to develop and that the CEO can not afford to jeopardize the company's improving on-time performance.

A United spokesperson told the Chicago Business Journal that the new prize program was meant to "build excitement and a sense of accomplishment". Earlier, the union had said that employees were "entirely opposed to and offended by this new "select' bonus program".

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United has more than 80,000 employees, although not all of them are eligible for bonuses.

Based on employee reactions, the program wasn't inspired by United's staff needs and requests. The report did not break out bonuses for executives and other workers.

Our intention was to introduce a better, more exciting program, but we misjudged how these changes would be received by many of you. Last year, the company paid out $87m in such rewards.

Kirby said Monday that United is now halting these changes to consider employee feedback, though he did not specify when the airline expects to have a decision about their next move.

How could United have avoided this crisis-and how can you steer clear of similar issues?

"Right now we are going to collect feedback from our employees to make sure we can create a new incentive program that will be meaningful to employees as we continue running a great operation and providing excellent customer service" she said in an email.