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?
"“D0” creates an environment where employees are solely focused on getting flights out on-time, and that’s not a good thing" - well, not really. The other measure (customer satisfaction) would suffer if, as you suggest, they are focused only one this one metric.
How myopic it is. Benchmarking the AA and DL. The lowest ones in the barrel.
If any progress is to be made, benchmark against the likes of QR, TK, LH, SQ, KL. No company that wants to progress compares against the ones who are equally bad or worse. Disgustingly pathetic this.
And dont go so stupidly simplistic as survey scores and in time performance but measure your staff on delivering a true customer...
How myopic it is. Benchmarking the AA and DL. The lowest ones in the barrel.
If any progress is to be made, benchmark against the likes of QR, TK, LH, SQ, KL. No company that wants to progress compares against the ones who are equally bad or worse. Disgustingly pathetic this.
And dont go so stupidly simplistic as survey scores and in time performance but measure your staff on delivering a true customer experience like normal airlines do instead of 'we are primarily here for your safety'. There are plenty of advanced measurements to assess this. Truly customer oriented companies use this.
Take a look at that instead of the crappy domestic (non) competitors.
It seems obvious that D0 and NPS are opposing metrics. I'd recommend to United employee that they alternate between the two. One month for NPS, notoriously hard to improve consistently and it's not like United is paying more for bigger gains. Then the next month for D0 -- rushing passengers and not caring will meet D0 targets and drop the NPS for easy gains next month. Just please let me know which months are which. Total yearly bonus will be $750.
Maybe the better metric is “arrive on time”. Frankly I don’t care if we leave a few minutes late as long we arrive on time.
I'll take EasyJet any day of the week ..
CHEERs
Like anything else, no matter what you do half the people think you are wrong.
Better suggestions than this?
United was very successful when they gave bonuses for becoming the #1 on-time airline. They were #1 for most of the time the bonuses were given and well behind before they were given. I concur about holding plays for connecting pax where it makes sense. I see the regional carriers under United contract having no concern for connecting pax.
Part of the past bonus program was awarding 11 automobiles ( Ford Mustangs, Explorers, etc)
in a perfect attendance drawing . No mention of this, obviously this is to reduce the cost of the program. Customer service will continue to decline as the company continues to reach for the bottom and squeeze every dime out of the operation. Starting February, the Flight Attendant group staffing will be reduced. Many have participated in an informational...
Part of the past bonus program was awarding 11 automobiles ( Ford Mustangs, Explorers, etc)
in a perfect attendance drawing . No mention of this, obviously this is to reduce the cost of the program. Customer service will continue to decline as the company continues to reach for the bottom and squeeze every dime out of the operation. Starting February, the Flight Attendant group staffing will be reduced. Many have participated in an informational picketing earlier this month. Meals in the front will be pre plated from the kitchen. Kirby and friends have made the environment toxic. All in the name of keeping the status quo with AMR and Delta.
Where into a moment where CEO'S are only interested in what they can receive on their Bonus Check and the Stockholders. If they where really thinking of their hard working underpaying employees they wouldn't need to play games, with equal pay. Stop trying to cheap them out of money due to them. Without your staff, you would never get that big fat check. Shame on you.
Good luck with that! If United wants to increase scores, Try keeping the extra f/a on the plane that you plan on removing come Feb.01 taking this away will almost guarantee that bonus payouts will not be made.
I would like to offer an incredibly fair employee bonus program that is amazing simple to implement. Award each employee a bonus that is pegged to the total bonuses paid to upper management.
This doesn't seem to paint a whole picture. Their profit sharing program (~$4K per employee in 2017) far outweighs this bonus program. There's also the annual incentive program which appears to also be driven by profits based on SEC filings.
Scott Kirby should be escorted from in corporate headquarters in handcuffs - United can’t get rid of him quickly enough. He is he epitome of corporate management greed
Go up a point in customer satisfaction each quarter?! That would be hard, especially if you are already up there in the first place. If based on surveys, forget about it. They don't have any other metrics to choose from? The plane taking off late? There should be a window to board connecting flight customers at least. Now the customers are pushed again like cattle.
Is the title correct? Did you mean United's New Employee Bonus Program?
Way to be original United. AA did the same thing a few years ago. This has Scott Kirby's, United president and former AA president, finger prints all over this. AA, DL, and UA copy each other at every turn.
@Lucky - I believe your math is off ($125 X 12 = $1500; a 25% increase).
Beyond the math though I think the new metrics are fine. They’re not perfect, but they’re at least somewhat tied to company performance. Surveys are a pretty standard way of gauging customer-facing employee performance. Many retail stores, from fast food, to banks, to the post office use surveys. You’re right that they’re not perfect, but they provide a good...
@Lucky - I believe your math is off ($125 X 12 = $1500; a 25% increase).
Beyond the math though I think the new metrics are fine. They’re not perfect, but they’re at least somewhat tied to company performance. Surveys are a pretty standard way of gauging customer-facing employee performance. Many retail stores, from fast food, to banks, to the post office use surveys. You’re right that they’re not perfect, but they provide a good balance of ease, expense, customer effort & reach.
D0 is complete crap. But a lot of employees lack common sense. What about heavy tail winds? Hold the damn plane and allow late connecting pax to board.