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Home » United Airlines » The “Real” Reason United is Changing Bonus Program
United Airlines

The “Real” Reason United is Changing Bonus Program

Matthew Klint Posted onMarch 9, 2018November 14, 2023 7 Comments

a man and woman wearing blue uniforms

After a unanimously negative reaction to the replacement of a popular bonus program with a lottery that would leave most employees with nothing, United is promising to listen to employees…before making changes. But WHY are changes needed?

The reaction was swift and fierce. When news surfaced last week of Scott Kirby’s plan to replace $300 quarterly bonuses with a “prosperity gospel” lottery scheme, employees pushed back hard.

And to United’s credit, Kirby issued a mea culpa (of sorts) and suspended any immediate changes to the bonus program.

Yesterday, we finally heard from United CEO Oscar Munoz, who sent this brief note to Untied employees (signed by both Munoz and Kirby):

Dear United team,

Following Scott’s note on Monday, both of us wanted to provide an update about our quarterly operations incentive program. As we said, we are going to take some time to reconsider our program and gather additional input.

Next week we will begin a series of listening sessions across the system with you and our leaders in order to get feedback and ideas as we structure a new program – one that has confidence across the company, makes people excited to come to work and deliver their best performance and sets the entire United family up for success.

In the meantime, the first quarter is coming to an end, and we know there are many questions about what we will do in the near term. So for the first quarter of 2018, we will maintain the same criteria for the quarterly operations incentive program as in the past.

We will introduce our new plan as soon as possible but will take the time to make sure that we get this right and move forward as a United team.

Gratefully,

Oscar
Scott

Why the Change?

In stating its goal, Munoz points out the reason for the change in the bonus program:

A new program … that has confidence across the company, makes people excited to come to work and deliver their best performance and sets the entire United family up for success.

But here’s an honest question: how can any cutback, even if the bonus was just reduced by $50/month, make people more excited to come to work? Weren’t workers already happy?

I asked United why. Why the change? Is this a cost-cutting measure? A spokesperson told me:

The goal is to create a program that makes people excited to come to work and meet our goals.

“Meet our goals”…that leaves us with quite bit of room for interpretation. The question still remains whether the highest goal is saving money or making people excited come to work. Unfortunately, I see the two as mutually exclusive.

CONCLUSION

Would it not be a brilliant Machiavellian move if United rolled out a bonus incentive program even more rewarding than the current system? Perhaps keeping the current bonus system AND adding a lottery? Would that give Munoz unprecedented support…perhaps to institute other more draconian changes later on?

I doubt that will happen. My guess is we will see a hybrid, with the guaranteed $300 halved or reduced in some other way.

But for now we can wait…and hold Munoz and Kirby accountable to their promise to “create a program that makes people excited to come to work”.

image: United

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About Author

Matthew Klint

Matthew is an avid traveler who calls Los Angeles home. Each year he travels more than 200,000 miles by air and has visited more than 135 countries. Working both in the aviation industry and as a travel consultant, Matthew has been featured in major media outlets around the world and uses his Live and Let's Fly blog to share the latest news in the airline industry, commentary on frequent flyer programs, and detailed reports of his worldwide travel.

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7 Comments

  1. 121Pilot Reply
    March 9, 2018 at 11:59 am

    United has contradictory desires here. First and foremost they want to cut what they are spending. Secondly they want a new program that despite being cheaper makes people more excited and more incentiveized to go the extra mile at work. It’s the management equivalent of ATC requesting minimum airspeeed and an expedited descent. The wants are mutually exclusive.

    That they have doubled down on their “listening” tour tells me that the current program is living on borrowed time and they will have their desired cost savings one way or another.

  2. Steve Reply
    March 9, 2018 at 12:05 pm

    As a non-airline employee I could care less.

  3. Mike Reply
    March 9, 2018 at 12:27 pm

    @Steve if that’s the case why did you read the post?

  4. Ward Reply
    March 9, 2018 at 12:28 pm

    Ha! ‘a prosperity gospel lottery scheme…” Brilliant!

  5. Adil Reply
    March 9, 2018 at 6:13 pm

    A Norwegian customer complained (in verse) about a fee he was charged, and the airline responded in kind:

    http://www.bbc.com/news/world-europe-43343546

    Perhaps United’s employees could use rhyme to mock their bosses with the next iteration of the bonus program.

  6. JoEllen Reply
    March 9, 2018 at 10:12 pm

    Truly disgusting, and I strictly blame Scott Kirby who is probably taking a page or two from Jeff Smisek’s book about how NOT to treat employees. Just when employees are finally liking a CEO (Munoz) who has been “involved” with employees and also getting past all the bad press of 2017 – Dr. Dao, leggings, etc, etc, etc., nothing can give them confidence after this debacle. United, like all the others, made $billions – TREAT YOUR EMPLOYEES RIGHT AND BE GENEROUS WITH THEM instead of kicking them in the face.

  7. Jamieo Reply
    March 10, 2018 at 2:28 am

    What Kirby fails to understand is that a regular ‘bonus’ which is constantly and predictably paid is not a bonus at all. It is part of the employee’s regular compensation and will be seen as such. So removing it is a pay reduction in the eyes of the employees. A true bonus is unpredictable and based on some specific event like extra high profit or some meritorious action by an employee.

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