United Has Yet Another Crisis, This Time Over Employee-Bonus Change

Thom Weidlich 03.15.18


We’ve seen several companies over the past year or so that have been unfortunate enough — or clueless enough — to be hit with multiple crises. Think Wells Fargo. Think Uber. United Airlines, another of the ilk, has been whacked yet again. This time the airline made a faux pas that upset employees, and so it has had to get its internal communications to take off. While the original mistake was bad, it appears the company listened and responded quickly.

In a March 2 memo to employees, United President Scott Kirby explained that the company would replace its quarterly performance-based bonuses with a lottery system. A lucky few would be rewarded with cash, cars, vacations, or other goodies. Every three months one worker would win a $100,000 grand prize.

The switch “quickly ignited a firestorm within the employee ranks,” according to Chicago Business Journal reporter Lewis Lazare. A company spokeswoman defended the new program.

But hundreds of employees lashed out on an internal website, according to Inc. For example, one wrote, “Awful idea. [Current] bonus program has everyone pulling in the same direction with a common goal. This is scratching a lottery ticket…” (“The fiasco pulled back the curtain on the widespread use of gamelike techniques for motivating employees,” according to The New York Times.)

Of course, over the past few years, United has been walloped with many crises, including a political scandal that cost its CEO his job, the illness of his replacement, and — most unforgettably — the furor over a passenger being dragged from a plane.

Several employee commenters touched on the company’s crisis history. One wrote: “It felt like we had just gotten to a place where employee morale was up. It took so many years for people to feel good about what was happening. In one fell swoop, it is crushed again. … Please rethink this decision.”

‘Thanks for Listening’

In our opinion management should have put some more thought into this at the beginning, but rethink it they did. On March 5, Kirby told employees the company was “pressing the pause button” to review the feedback and consider how to proceed. Employees turned to that same internal website to thank Kirby, with many saying something along the lines of “thanks for listening,” according to Inc.

On March 8, another employee email went out, this time over the names of Kirby and CEO Oscar Munoz (he of the previous illness). The end of the quarter was approaching and the two men addressed concerns about which bonus program would be operative. They would be sticking with the old one for now, they explained.

But they would be crafting some sort of new program, they promised, which will probably continue to hurt employee morale. It appears United feels the old incentive program was costing too much.

The email from Munoz and Kirby also reminded employees that the company would be conducting “listening sessions” starting the next week to get more feedback on the lottery idea.

Listening is a good idea.

Photo Credit: United Airlines

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