A few days ago United announced that they would be eliminating quarterly bonuses for their employees, which were up to $300 per quarter when United met their goals (which isn’t an insignificant amount of money, when you consider United has lots of employees making $10-15 per hour).
Instead they planned to replace this with a lottery system that includes quarterly prize drawings, ranging “from $2,000 to $40,000, luxury cars, vacation packages, and a grand of prize of $100,000 awarded to one eligible employee per quarter.” This drawing would happen each quarter as long as United reached at least one of their performance goals.
I think it goes without saying that this was a cost saving measure on United’s part, when you consider that they have 88,000 employees. Many companies seem to assume everyone is dumb, and United’s president spun this change as a positive, suggesting that this was an “exciting new rewards program,” and a United spokesperson said that they believed this “new program will build excitement and a sense of accomplishment as we continue to set all-time operational records that result in an experience that our customers value.”
On top of that, this new program was out of touch. If someone makes $10 per hour and wins a “luxury car,” how are they supposed to pay the taxes, insurance, and maintenance on it?
United employees were livid, partly because they were having a consistent bonus taken away, and partly because management was trying to spin this as a positive. It’s one thing if United were struggling and they needed to cut back, but what this really boiled down to is United management saying “hey, we’re doing as well as we ever have, we’re so proud of you, and to reward you we’re going to cut your bonuses.”
United received thousands of complaints from employees over the weekend, and the unions wrote a strongly worded letter.
It’s now being reported that United is “pressing the pause button” on these changes to their rewards program. Scott Kirby wrote the following in a letter to employees today:
“Our intention was to introduce a better, more exciting program, but we misjudged how these changes would be received by many of you.”
Now the airline is reaching out to employee work groups to come up with a program that better reflects their feedback. So it doesn’t sound like the program will remain as it currently is, but rather they’re going to come up with another program that presumably lowers the cost to management.
It’s great that the negative outcry made a difference, though it’s still so ridiculous to begin with that Kirby is suggesting they “misjudged how these changes would be received” by employees. This was indisputably a cost saving measure, so I think what he’s trying to say is “oops, I misjudged the fact that our employees picked up on our attempt at cutting their bonuses.”
I’m not yet ready to give United management much credit for listening, though. As of now they’ve just pushed the pause button on the program. Perhaps they’re just pausing until they can find a different way to spin this, or to acclimate everyone to the idea. Hopefully United management realizes that everyone is going to be watching much more carefully this time around, so they better not try to pull a fast one again.
I’m curious to see what they come up with now, after supposedly consulting with their work groups.
(Tip of the hat to DB)