Wednesday, 16 January, 2019

United Airlines backs down on plan to replace employee bonuses with 'lottery'

United Airlines replaces quarterly bonuses with a lottery angering some employees Some United Airlines employees are upset about a plan to replace quarterly bonuses with a lottery
Ginger Lawrence | 09 March, 2018, 03:07

More modest winnings were also available, but workers balked because the majority of United's nearly 90,000 employees would forgo quarterly checks in the $250 range. United spokeswoman Maddie King said that frontline employees - those that deal directly with customers - and some members of management would be eligible for the bonus program.

United Airlines (NYSE:UAL) is forgoing cash bonuses and will instead reward employees by entering them into a lottery in which they have the opportunity to win cash, a auto or a vacation, according to the Chicago Business Journal.

United Airlines' plan to replace bonuses with a lottery system simply wasn't flying with its employees. In addition to the big cash prize, smaller cash prizes between $2,000 and $40,000, Mercedes-Benz C-Class sedans, or vacations will also be doled out. The lottery system was meant to replace a program that allowed each employee to receive a bonus of up to $300 per quarter if the company hit certain operational targets.

The backlash and reversal comes while United is negotiating a new union contract with its pilots. 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.

On Monday, the president of United Airlines, Scott Kirby, told employees that the company was rethinking the lottery. The company has been under pressure to keep shareholders happy as budget airlines have been taking away market share.

The details, released in an internal memo acquired by The Chicago Business Journal, include a quarterly raffle-style giveaway.

Prior to Friday's announcement, all eligible United employees could receive up to about $300 per quarter, or $1,500 per year, a United spokesperson said. United Airlines did not immediately respond to a request for comment from Fortune.

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The two men, he said, spoke for no more than 30 minutes, or about the time it took him to drink a beer. Bannon and the president's son-in-law, Jared Kushner , according to people familiar with the matter.

"Our intention was to introduce a better, more exciting program, but we misjudged how these changes would be received by many of you", Kirby wrote.

The core4 program was first rolled out by Kirby in in January, as an employee incentive to help build up the airline's new, more "caring" image. Chicago-based United employs about 88,000 personnel worldwide. The report did not break out bonuses for executives and other workers. Last year, the company paid out $87m in such rewards.

It was roundly criticized by workers' feedback.

A company's culture is indelibly intertwined with an organization's brand.

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

Though internal programs should support your organization's mission statement, vision and goals, this crisis can stand as a lesson for communicators to consider employee needs when implementing a program-not just numbers.

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