United tried to replace bonuses with a $100000 lottery

Posted March 07, 2018

FBN's Tracee Carrasco on United Airlines' plans to replace its employee bonuses with a chance to win prizes.

United Airlines management did a fast U-turn March 5 after a proposed overhaul of quarterly employee bonuses met with barrage of resistance.

"We announced a new internal program based on United meeting certain operational and dependability metrics as a way of offering meaningful rewards to our employees", a company spokesman said last week.

The system would have replaced quarterly, performance-based bonuses and rewards for flawless attendance with a lottery-based system, where eligible employees would be entered into a drawing for a variety of prizes if the company hit one of its performance goals during a calendar quarter.

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Other prizes included the Mercedes sedans (10 winners), a choice between a vacation package or $20,000 (20 winners), a similar choice at the $10,000 level (30 winners) and a variety of other cash prizes. Of roughly 500 comments I read, four were positive (and three of those were from the company's vice president for human resources, responding to the negative comments).

The airline described the new scheme as a "more impactful and meaningful program" for its employees who used to be eligible for a bonus if they attained flawless attendance.

According to a report at Business Insider, which has seen the memo announcing the program, the maximum number of employees who will receive a bonus payout during a quarter will be 1,351, of which 73% will receive a $2,000 cash prize. Employees are said to be pretty displeased with the new approach. The bonuses were given to not only United's 24,000 flight attendants but also its pilots and gate agents among others, she said.

It felt like we had just gotten to a place where employee morale was up.

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The carrier employs about 88,000 people around the world.

Yesterday, United President Scott Kirby told workers that the company was "pressing the pause button" on the lottery, and taking time to "review feedback".

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.

The lottery system, with about $18 million in rewards per year available for rank-and-file workers, may have cost the company far less.

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Kirby said the airline would reach out to employee work groups and changes made would "better reflect your feedback".