United Airlines’ President Scott Kirby is on the warpath again, this time unleashing a plan that will slash bonuses for most employees.
In January, I wrote about United’s new “core4” emphasis, which will focus training on the following four areas, ranked in order of importance:
- Safe
- Caring
- Dependable
- Efficient
> Read More: United’s Surprising New Emphasis in Customer Service Training‘
In a memo to employees which I have read but will not post in full here, Kirby announced a new program that will replace quarterly performance awards (which recently amounted to about $300 per employee).
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, which includes quarterly prizes like luxury cars, vacation packages and a grand prize of $100,000!
I wonder sometimes if the millions of dollars in annual compensation are not enough and Kirby moonlights as a used car salesman…
core4 Score Rewards
Here are the awards–
|
core4 Score Rewards Prizes |
Winners per Quarter |
|
$100,000 cash |
1 |
|
Mercedes-Benz® C-Class or $40,000 |
10 |
|
Platinum United Vacations® package or $20,000 |
20 |
|
Gold United Vacations package or $10,000 |
30 |
|
$5,000 cash |
300 |
| $2,000 cash |
1,000 |
Let’s do the math. United has around 86,000 employees. Say each employee received a $300 bonus for United’s operational performance. That’s $25,800,000. I’d imagine a smaller subset than total employees were eligible for this, but for conservative estimates let’s say at least half of that or $12,900,000.
The total value of the new bonuses adds up to $4,700,000. Hmm…
In order to be eligible for the new bonus lottery, United will need to achieve performance goals AND employees will need to record perfect attendance. Will we now see sick gate agents and FAs working our flights?
In the memo, Kirby also added–
The reason for this change goes to the heart of our strategy: offering meaningful rewards will build excitement and a sense of accomplishment with more bang for the buck.
We want every United team member to picture themselves walking home with a grand prize, or driving home in a beautiful car that announces for all to see that you are committed to your success and ours.
Folks, I’m not making this up. It seems that Kirby has been listening to Kenneth Copeland or Creflo Dollar too much lately…
I’ve heard from many gate agents and FAs about this today…all are angry and feel betrayed. And unfortunately, that means customers will likely feel the brunt of this disappointment and sense of betrayal at airports and in the air.
CONCLUSION
My assessment of the situation: this is a self-inflicted wound. United should promptly rescind this foolish new bonus lottery and reinstate the old $300 payouts. These bonuses fostered team effort and boosted morale. Did Kirby and United really think the employees would simply say THANK YOU to losing up $1200/year from their paycheck? I’m shaking my head.
View from the Wing take a more a humorous look at the issue, but this is really no laughing matter.
This is what Southwest does. The problem is that employees (or people in general) don’t like change. Sounds like it wasn’t communicated well.
I don’t see anything wrong with incentivizing behavior by issuing awards only to those who earn it. However, don’t put a cap on the # of awards. Make if available to all who earn it.
The car and vacation packages are subject to income tax (as are all the awards) but without the cash to pay the tax. The Mercedes will generate around $10,000+ of tax.
Scott’s “new and improved” bonus program will save UA over $120m. As an employee, if that money isn’t going in my pocket, at least show me some dignity, and be transparent in its destiny. My concerns with Scott are beginning to take shape.
10k seems like a decent deal for a Merc.
It you disagree, there’s always the reward under door number 2.
And how’d you like to be an employee with the tax liability on an inflated value vacation package?
I wouldn’t. This “new” program is very unfortunate, and a total shift from what the company has been preaching over the past year.
How about Powerball tickets for the employees that don’t win the raffle? Or pizza delivered to crew working routes with perfect customer satisfaction scores?
I don’t think all 86,000 employees are part of the operational bonus and perfect attendance awards. It’s safe to assume the front line employees (GA/FA/CS) and mechanics are part of this.
So my reward for working very hard and being an exceptional employee is that I’m entered into a lottery? I’d start looking for another employer (and I’d sell any stock I may have)
They should add the raffle to the current bonuses…have them both. I’m dreading my Continental flight next week…I’m sure they’ll be more bitter and unfriendly than ever.
I see a problem with it. It sucks to incentivize employees to come to work sick, which not only spreads flu or other illness to fellow employees, but also to passengers. Those with autoimmune issues can die.