United has just announced the (rough) details of their new employee bonus program, which should give you a sense of what the airline will be focused on in 2019.
United’s previous bonus program snafu
This past March, United announced that they would be eliminating quarterly bonuses for their employees, which were up to $300 per quarter when United met their goals.
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.
This was clearly a cost saving measure on United’s part, when you consider that they have 88,000 employees. 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.”
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. Given how viral the story went, after less than a week United realized that they had no choice but to backtrack.
Ever since they’ve been working on a new program, and have said that they wouldn’t introduce a new program until 2019. They’ve now revealed the details of a potential new program.
United’s new employee bonus program
Skift has the details of United’s new employee bonus program. The good news is that in theory the bonuses that employees can earn are increasing. United’s current program offers up to $300 per quarter ($1,200 per year), while United’s new program offers up to $125 per month ($1,500 per year). So in theory the bonuses could increase by up to 25%.
Previously United almost always met their targets for the purposes of these bonuses, while the new ones will be more of a stretch:
- Employees can receive $75 per month if United raises its customer satisfaction scores by one point, year-over-year; this is based on the surveys that United sends out to customers, asking them to rank their experience on a scale of one to five
- Employees can receive $50 per month if United beats American, Delta, and Southwest on “D0” departures, which is a measure of flights departing exactly on-time or early
As United’s EVP of human resources and customer relations says:
“These are two metrics that we can all influence, whether we interface directly with the customer or support the operation behind the scenes, and they both reflect our commitment to serving our customers.”
My take on United’s new program
On the plus side, I think the new program is much better than the completely out of touch “lottery” that United previously wanted to introduce, which they spun as a positive.
On the surface I think motivating employees to provide good service and operate on-time flights is a good thing. However:
- Generally I think there have to be better metrics of customer satisfaction than just the post-flight surveys they send out, which typically only really happy or really annoyed customers fill out
- “D0” creates an environment where employees are solely focused on getting flights out on-time, and that’s not a good thing; sometimes it makes sense to wait for a few connecting passengers, or to process a few last minute upgrades even if it means the plane leaves a minute late (and may still arrive on-time or even early); to me a “D0” policy is a customer disservice
What do you make of United’s new employee bonus plan?