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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 6, 18, 6:11 am
  #196  
 
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Has anyone been able to quantify what the total compensation for the affected employees looks like? Someone else reported that the employees are receiving Cash Profit Sharing (CPS) in addition to base salary / cash compensation. What is the average value of these quarterly performance bonuses?

The headline certainly is attention grabbing, but is it that big of a deal in terms of a dollar amount, relative to their total comp?
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Old Mar 6, 18, 6:12 am
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I really despise the D:0 metric.

In my opinion, it pushes front-line staff into making bad decisions just to make the metric. Think about all the times we hear of someone complaining that an aircraft door wasn't held open for "two more minutes," or flights that went out mis-catered or not so clean.

Since the metric that the bonuses being measured against isn't whether or not you made a smart decision that saved the company money, rather that you released the aircraft brakes come hell or high water by the D:0 time, what incentive does an employee have to screw up their station/region/national D:0 metric in favor of the traveling public? Other than, I suppose, not being screamed at or having to do a bit more work to handle re-accommodation. A:15 is a much better performance metric that can encompass good tactical decision-making both on the ground and in the air.
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Old Mar 6, 18, 6:20 am
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Originally Posted by LRMErnst View Post
I experienced this last night on my SFO-ORD flight. Towards the end of the service, the Service Coordinator came over the PA, apologizing for the interruption, to tell us all about this amazing offer, including 50,000 bonus miles, free checked bag, etc, etc. He sounded like he had a smile on his face. But that wasn't enough...he had to walk through the entire plane politely presenting the brochure to everyone, even when it became awkward.

I felt bad for the guy because the whole situation was absolutely cringe worthy - I breathed a sigh of relief when it was over. No doubt though, this sales pitch was a mandate from HQ - and the petition is dead on, it felt cheap.
It makes more sense when you remember that these days UA (and the others) are credit card/loyalty program businesses, with side businesses in transportation.
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Old Mar 6, 18, 6:49 am
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Originally Posted by tuolumne View Post
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.
Tech companies, and many others in traditional industries, are recognizing that some decisions need to be made quickly, even if there's the potential for failure. Personally, I like to see companies move quickly to try something new, even if it doesn't always work out. Spending too much time over analyzing everything is a good way to manage yourself out of business.

Clearly, airlines can't make any compromises on safety. I think there's too much significance placed on the announcement of an incentive structure, and the willingness to walk it back when it was poorly received.

I think there's an onus on employees to look at the situation reasonably: they didn't like a management decision and they provided feedback in an appropriate and largely constructive manner. Management listened and is changing course. If employees can't see that as the basis for a productive relationship relationship, I think that United is saddled with a bunch of hopelessly inflexible employees.
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Old Mar 6, 18, 6:56 am
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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.
Bad decisions happen all the time in corporations in any field of operations including initiatives that don't work out and need to be reversed. Just recently Lufthansa overhauled their entire branding only to realize a week later that the blue they went with is way too dark. They spent several millions on that.

From my own personal experience with medium to large corporations I can't think of one that didn't make some bad calls on a leadership level or below. Some of them worse than this one (which hadn't even been implemented yet before being reversed). I've also seen situations where employee benefits were reduced and people weren't thrilled.

One thing that is different here though to my personal experiences and perhaps a sign of the toxicity of United as a company is (1) that employees immediately took their outrage public and (2) the rampant ultra-negativity vs leadership which is indicative of very low trust and bad labor relations. It seems like employees at UA are willing to use the public's negative view of United and thus the media's willingness to do negative stories on United as a way of blackmailing leadership into doing as they wish. Of course, that is self-defeating..as they're reinforcing the very negativity that threatens the sustainability of their own jobs at United.
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Old Mar 6, 18, 7:03 am
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Originally Posted by 94010flyer View Post
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.
I agree with the thought behind your #2 , but there are few cases where you should test major comp changes (which dissolution of a bonus plan would be, regardless of the $ amounts) with focus groups for a number of reasons I'm sure you'd come up with after thinking about it for a bit. In fact, the announcement of the program was more or less a big focus group, and look what happened. What's more amazing to me is that I can't think of any credible compensation consultants that would suggest or approve of a program like this. It smells like a decision that was made by Kirby solely on his own, perhaps based on prior experience. I think if it had been implemented, Kirby would have been fired within a year and UA would have told it's employees that they were working on a new program.

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.
You're 100% correct, but I don't think it should be used as an excuse for anything UA or other corporations do or fail to do. You need Amazon-like quickness for programs released to your customers, you don't want it for an employee comp program. With delivery speed comes a certain expectation that a release may not be perfect. As customers, we're getting used to that. We can wait for Apple to get their maps right as long as we get all the other new iphone features every year. But you don't mess with people's compensation without making sure you're 100% ready to implement it and back it up. Even though this program will now never be implemented (as most people know "pause" is exec speak for scrapping something without admitting it was stupid and wrong), I can guarantee that it's already deepened the trust issues employees have with management.
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Old Mar 6, 18, 8:09 am
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If UA wants to be like amazon and google....have them work on getting pde working on all devices and hard product issues, not piss off the folks that provide the soft service/intangible items. Or here is a novel idea, implement personal metric goals.

How do folks here think a metric tied bonus is an enitlement? If you hit the metric you get the bonus...period. where is the entitlement? In this case you hit the metric and you get the chance at a bonus...yup even better

Overall you structure the incentive to be achievable but not impossible and enough to make it worthwhile. If it doesn't work you don't make it worse, you find out why the incentive isn't working then adjust. I can't imagine UA employees said "we want drama to that metric bonus...all in and let it ride".
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Old Mar 6, 18, 8:40 am
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Originally Posted by flybit View Post
hes using the same motivation from customers by adding 50 more RJ jets to the fleet.
About a year after deciding to forego a deal with Boeing to purchase 60 B733's at $20MM a piece.... that would have been so nice to replace some of the CRJ-200's and RJ-145's on the longer routes (GRR-DEN, FAT-DEN, EWR-OMA, etc etc)... but now, we have the new AW CRJ-200's (that run lots of new routes from IAD's A gates.. ugh!

Not to mention... if my company EVER decided to forego bonuses in exchange for a lottery program, I would quit almost immediately and move on.
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Old Mar 6, 18, 10:01 am
  #204  
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Originally Posted by rufflesinc View Post
Why is it that cost cuts never involve executive bonuses?
Because executives never eat their own, only their employees young
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Old Mar 6, 18, 10:10 am
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I would be really interested to see employee turnover rates for different positions compared across all US airlines. You don't spring something this obviously bad on employees unless you really don't care if they stick around.

As to the whole 'fail fast' tech company culture....moving fast is not an excuse for putting no thought into ideas. The goal is not failure, rather accepting and learning from failure is merely a recognition that success is not always a linear process. You should be sure that the problem you're trying to solve is important, and have a clear idea of what you success looks like. It's very easy to move quickly downwards or backwards I don't think the best way to cut employee compensation is one of the most important and impactful problems facing United right now. If the goal is truly to motivate employees, then I don't see any logic behind making compensation random.
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Old Mar 6, 18, 11:14 am
  #206  
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Originally Posted by zymm View Post
. If the goal is truly to motivate employees, then I don't see any logic behind making compensation random.
This is the crux of the matter. I get it that management was looking for a way to motivate employees. That they thought random compensation would be appealing to most of their employee base shows just how out of touch they are with their employees what it means to be a leader of an organization.

United needs to stop listening to high-priced “consultants” for expertise in running an airline. If those consultants were really any good at what they did, they’d be working for those industries that they are advising.
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Old Mar 6, 18, 11:20 am
  #207  
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Originally Posted by halls120 View Post
I get it that management was looking for a way to motivate employees. That they thought random compensation would be appealing to most of their employee base shows just how out of touch they are with their employees what it means to be a leader of an organization.
I don't think management believed that for a second. This was about cutting the costs of the bonus program, and then pitching the change as an "enhancement."

Sound familiar?
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Old Mar 6, 18, 11:48 am
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Originally Posted by Kacee View Post
I don't think management believed that for a second. This was about cutting the costs of the bonus program, and then pitching the change as an "enhancement."

Sound familiar?
Agree. It seems rather curious given that their improved operations lately has to be saving them money, compared to sub-par ops just a short time ago. The bonus worked...
Typical United Management.
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Old Mar 6, 18, 1:27 pm
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Originally Posted by luke5111 View Post
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.
Agree.

Several years ago, United had a program where customers were given slips of paper which were filled out and given to employees in recognition of good service, above and beyond. I forgot the name of the program, but I really liked being able to do that. The employees would turn in these slips to their supervisor (?) and they were then eligible to win prizes, mostly monetary, I believe. The employees were very appreciative when you handed them one.

I had one FA that I nominated win a cash prize which was enough to take her, her husband, and parents on a vacation. I still see her and she is forever grateful. In my opinion, this type of incentive program is worthwhile.
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Old Mar 6, 18, 1:47 pm
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Originally Posted by FLYMSY View Post


Agree.

Several years ago, United had a program where customers were given slips of paper which were filled out and given to employees in recognition of good service, above and beyond. I forgot the name of the program, but I really liked being able to do that. The employees would turn in these slips to their supervisor (?) and they were then eligible to win prizes, mostly monetary, I believe. The employees were very appreciative when you handed them one.

I had one FA that I nominated win a cash prize which was enough to take her, her husband, and parents on a vacation. I still see her and she is forever grateful. In my opinion, this type of incentive program is worthwhile.
It was called "Going the Extra Mile", which FTers consolidated as "GTEM" .

There was a report that GS members got some type of similar chits in their annual packet this year, but didn't sound like a fully-formed program like before.
It was a great program, for both customers and staff....so doubt it will come back.
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