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UA employees shocked: (qtrly performance) Bonuses replaced with lottery (on "pause")

UA employees shocked: (qtrly performance) Bonuses replaced with lottery (on "pause")

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Old Mar 5, 18, 5:08 am   -   Wikipost
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Update 5 March 2018 per Chicago Tribune (and confirmed by internal employee memo
United walks back new bonus lottery system that angered employees
United Airlines on Monday reversed plans to begin awarding bonuses through a lottery system that angered employees.

Scott Kirby, president of the Chicago-based airline, said United was “pressing the pause button” on changes that would have handed out larger bonuses to only a fraction of its workers after hearing employees’ feedback since announcing the changes late last week.

Per Chicago Business Journal, 2 March 2018
​​​​​​​United Airlines employees shocked: Bonuses replaced with lottery

United Airlines President Scott Kirby sent shock waves through the employee ranks at the Chicago-based airline today.

Kirby issued an employee memo in which he announced that the Chicago-based airline is dropping the quarterly performance bonuses the carrier had been giving out to all employees qualified to receive them.

Kirby said in the memo, obtained by the Chicago Business Journal, that the bonus payouts are being replaced with a new program called "core4 Score Rewards," which Kirby said would include quarterly prizes like cash 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.
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Old Mar 5, 18, 4:47 pm
  #181  
 
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Originally Posted by Miles Ahead View Post
They've "paused" the lottery system. Have they actually said they are reinstating the old program?
Now that is a good question! If they pause the bonuses and the lottery, then UA's operational performance can also be expected to hit a pause.
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Old Mar 5, 18, 4:47 pm
  #182  
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Originally Posted by Ber2dca View Post
Originally Posted by WineCountryUA View Post
The quarterly performance bonuses varied depending on the operational performance metrics set by the company. So there was/is a correlation between performance and the size of the bonus. They were on a regular time schedule.
So were these metrics counted per person, per unit or per company?
From what has been posted on FT appears they were company-wide metrics so there was little individual linkage, more of a group/ overall team effort. But that is pretty traditional for larger workgroups, harder have individual objective metrics and there be significant costs in creating such a system. Individual metrics are more common for specific workgroups like sales or senior / execitive levels.
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Old Mar 5, 18, 5:05 pm
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Originally Posted by cerealmarketer View Post
Even Gerald Greenwald, the epitome of 'good to great' type CEOs that gave them a few good years after the Steven Wolf era was smart enough to know he couldn't keep it up, and left UA at the peak in 1997, only to have it descend into chaos just a few years later.
Greenwald was probably the best of a very bad lot. However, he was not a "Good to Great" advocate. I really recommend you read the book before you mock it.
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Old Mar 5, 18, 5:11 pm
  #184  
 
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Originally Posted by WineCountryUA View Post
From what has been posted on FT appears they were company-wide metrics so there was little individual linkage, more of a group/ overall team effort. But that is pretty traditional for larger workgroups, harder have individual objective metrics and there be significant costs in creating such a system. Individual metrics are more common for specific workgroups like sales or senior / execitive levels.
Which in the context of rank and file airline employees makes a good deal of sense. People working strongly as a group mean the planes stay on schedule, the bags make it to the belt, the person who can't manage a complex rebooking can more easily get help from someone who knows how to finesse that part of the system....
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Old Mar 5, 18, 5:28 pm
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Glad to see United is taking a "pause" on this effort. Hope the old program remains in place. I really don't know what they're trying to do but they better be clearer to the employees about intent. I suspect this is part of their cost cutting initiative to reach $3 billion in savings that they promised (for reasons passing my understanding) to their investors.
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Old Mar 5, 18, 5:36 pm
  #186  
 
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Originally Posted by WineCountryUA View Post
From what has been posted on FT appears they were company-wide metrics so there was little individual linkage, more of a group/ overall team effort. But that is pretty traditional for larger workgroups, harder have individual objective metrics and there be significant costs in creating such a system. Individual metrics are more common for specific workgroups like sales or senior / execitive levels.
It's a mistake as it allows sub-par performers to hide behind the efforts of the good performers (and I know first hand it's not handled like this in every company). We all know there's a huge variation in performance within UA, we've seen the 'stars' and we've seen the bad apples. If all of them get bonuses on the backs of the 'stars' then there's zero performance incentive in it and if anything it just is seen as part of a salary.

Now, the proposed lottery wouldn't really have fixed that as it would still not consider individual performance. It was obviously a faux pas because apparently within UA's culture this was always going to be seen as a veiled salary cut. From a customer point of view - but even a management point of view - it sure would be great if those workers doing right by the customer and the company get extra rewards.
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Old Mar 5, 18, 5:55 pm
  #187  
 
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I don’t think I can recall a corporation burning such badly-needed goodwill from employees so freely and with abandon like UA has done with this plan. Kirby has no way of regaining the trust lost from this debacle. What an idiot.
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Old Mar 5, 18, 6:02 pm
  #188  
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Originally Posted by Karl-MDW View Post
How can a company as big and complex as United announce something that has not been well thought out? The effects of this stupid plan - and its "pause" will have an extremely negative impact on United's already delicate public image - just as it was beginning to recover from last year's dragging incident. What stupid self-inflected mess! Not to mention even more CRJ 200!

Why can't this company get it right?
New Coke
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Old Mar 5, 18, 6:08 pm
  #189  
 
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I'm not sure whats more disturbing 1) that someone at United thought this patently horrible idea was a good idea or 2) that United apparently did not attempt to focus group test this concept with rank and file employees before announcing it. It does not give one comfort into Kirby's decision making process and his brain (or apparently lack of brain) trust at United. If he can flub such an obvious decision that almost is so laughable it reads like an Onion satire article, how the hell is management making the complex decisions needed to make an airline run well. What obviously bad idea is Kirby going to adopt next. I hope this guy's time at United is limited.
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Old Mar 5, 18, 7:45 pm
  #190  
 
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Happy to hear this has been "paused", but what an awful idea not to have vetted this somehow before...
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Old Mar 5, 18, 8:10 pm
  #191  
 
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Originally Posted by KansasMike View Post
Greenwald was probably the best of a very bad lot. However, he was not a "Good to Great" advocate. I really recommend you read the book before you mock it.
The book's key examples include Jack Welch's GE and John Stumpf's Wells Fargo - which became two of the biggest disappointments in American business this decade. And 'experts' lay many of their current issues on practices put into place by those celebrated CEOs. i personally don't hold them responsible - what time frame should you manage, but i digress. The court of public opinoin seems to have no statute of limitations around here.

There are a lot of good things in it and many other books on the business shelf, but United needed more than a new CEO.

Few on flyertalk would have said in 2007 "we really need Richard Anderson to come in and turn around Delta."

Turns out having run Northwest he was the right guy to get their labor groups to behave during the acquisition and keep the flight attendants non union. Glenn Hausenstein from Continental engineered the product and network moves, Ed Bastian kept the Delta Atlanta DNA intact. Both of those guys were not Anderson picks, but inherited with the business. Meanwhile AA/UA got to battle their unions, while Delta didn't (with a lot of help from DL FA unions being a bigger group than NWs), and Delta enjoyed the lowest variable cost hubs in the business in a time of consolidation that let them scale them further.

There are reasons top talent wasn't lined up for the UA job - and it's not just because of the board.

Last edited by cerealmarketer; Mar 5, 18 at 8:18 pm
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Old Mar 6, 18, 12:13 am
  #192  
 
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Originally Posted by Ber2dca View Post
That one tweet seems to imply that bonuses were and I suppose now still will be automatic. Automatic bonuses are basically worthless in terms of encouraging good performance because they just end up being considered to be a part of people's salaries i.e. something people feel entitled to regardless of their personal performance. That sense of entitlement certainly came through in a few of the more outraged posts about it.

UA might keep hiring the wrong CEOs, but maybe it's because trying to manage a company with an entrenched union workforce full of 40+ employees that will place their personal benefits and perks above anything else is like trying to catch a greased up pig.
I agree up to a point but in an organization like UA you can't have an environment where 'most of you suck but the lucky ones will get something big but they may not actually want it". (like a luxury car with a big tax bill). However, this should have been presented as "you will all get your bonuses but there are a few folks that have been nominated by customers and staff that are in line to get life changing bonuses". Not much money to UA but something that might push a few people to go above and beyond. Although, they probably already do go above and beyond every day. Yes, find a way of recognizing them and you have a real incentive. That could have made for some really good press and some really good PR for the employees. Am sure somebody already mentioned this in prior threads but I was too tired from reading the negative ones that didn't bother to offer alternatives that were bettee


And, by the way, if you're going to offer a car or something, make sure it includes an additional amount to cover the extra taxes so that the car is not a burden.

Last edited by WineCountryUA; Mar 6, 18 at 12:17 am Reason: merging consecutive posts by same member
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Old Mar 6, 18, 12:36 am
  #193  
 
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Originally Posted by Karl-MDW View Post
How can a company as big and complex as United announce something that has not been well thought out? The effects of this stupid plan - and its "pause" will have an extremely negative impact on United's already delicate public image - just as it was beginning to recover from last year's dragging incident. What stupid self-inflected mess! Not to mention even more CRJ 200!

Why can't this company get it right?
Making infallible decisions at big companies takes lots and lots of time. This is certainly an issue United (and other more established companies) struggle with. Many companies are trying to become more quick and nimble like Amazon or Google, making decisions quickly and taking some risks (in areas that don't impact safety). I guess that's not okay with FlyerTalk either.
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Old Mar 6, 18, 5:44 am
  #194  
 
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Originally Posted by enviroian View Post


AA has been doing this on every flight for quite sometime now.

All the airlines have shrunk to new lows. It’s the world we live in.
It reminded me of the personnel pitching airline credit cards and energy discounts in the airport terminals...I keep my head down and try to avoid them at all costs.
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Old Mar 6, 18, 6:02 am
  #195  
 
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Originally Posted by fly18725 View Post
Making infallible decisions at big companies takes lots and lots of time. This is certainly an issue United (and other more established companies) struggle with. Many companies are trying to become more quick and nimble like Amazon or Google, making decisions quickly and taking some risks (in areas that don't impact safety). I guess that's not okay with FlyerTalk either.
Respectfully, I think you are using quite a broad brush with that statement. What decisions that tech companies are making? Because M&A decisions are different from operating procedure decisions which are different from HR decisions. It’s a real stretch to use that as an excuse for United here. This is undeniably bad optically and tactically as well, especially since Munoz has used the last two years as a time to reestablish relations with a battered employee base. This program, and especially the borderline comical language that was used to communicate it, was a definite miss, no if and or buts about it.

I was and still am in some ways taking a wait and see approach to Kirby and found the vitriole here from day one regarding him concerning at best. After this, I think it’s clear that he’s damaged himself with the employee bases, who were sceptical of him from the start.

Last edited by tuolumne; Mar 6, 18 at 6:19 am
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