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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 2, 18, 6:21 pm
  #31  
 
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“Congratulations, you’ve won a new Mercedes luxury car!...


We’ll send you the tax bill.”


Oofff.
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Old Mar 2, 18, 6:47 pm
  #32  
 
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Makes sense. This is how GPUs work.
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Old Mar 2, 18, 7:23 pm
  #33  
 
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Originally Posted by mherdeg View Post
Makes sense. This is how GPUs work.

Nah. They have to put a minimum salary requirement to be the same.
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Old Mar 2, 18, 7:26 pm
  #34  
 
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Originally Posted by PsiFighter37 View Post
I thought Kirby was liked internally at UA because he was a 'plane guy'.

What a disaster. He needs to go. I can't think a single good thing that has happened to UA (not counting new route announcements) since he joined.
- His pet project, Basic Economy, was implemented so poorly that they even admitted on an investor call it wasn't working out the way they hoped. They've had to roll it back in certain markets almost as quickly as they rolled it out.
- The Polaris retrofit and lounge building has been so hilariously slow that it's eliminated much of the initial goodwill from the Polaris announcement
- On the theme of eliminating customer goodwill, the onboard service cuts (and the catering cuts in domestic first, and the ongoing unresolved Denver issue) certainly smacks of something Kirby is responsible for since this is what he was known for at AA
- Now this stinker of an idea, which any kid in behavioral econ class could've told you was a bad idea, has infuriated employees. One of Oscar's successes since coming onboard was finally instituting a semblance of satisfaction among the employees and some faith in the leadership. This just stomps all over that.

Less than two years into the job, Kirby's incompetence has been truly impressive.
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Old Mar 2, 18, 7:28 pm
  #35  
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Originally Posted by mahasamatman View Post
This is about the worst idea United could have come up with. I hope the employees strike over this - I'd certainly support them.
If the bonus payments aren't specified in the contract employees can't strike. Never trust supplemental compensation at management discretion.

This is just an unspeakably bad idea, like McKinsey was attempting self-parody.
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Old Mar 2, 18, 7:34 pm
  #36  
 
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So did he add his variable compensation to the lottery pool? My guess is no.
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Old Mar 2, 18, 7:40 pm
  #37  
 
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McKinsey sure did a bang up job with this and the Gemini algorithm.
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Old Mar 2, 18, 8:08 pm
  #38  
 
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This does not replace profit sharing. Employees will still get $349 million.

Monthly performance bonuses are usually no more than $100-200.
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Old Mar 2, 18, 8:26 pm
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Originally Posted by fly18725 View Post
This does not replace profit sharing. Employees will still get $349 million.

Monthly performance bonuses are usually no more than $100-200.
Scenario A: Employees A, B, C, D, and E all get $100 bonus. Scenario B: Employee E randomly gets a $500 bonus and the rest get nothing. Which scenario do you think is going to cause more bitterness and discontentment?
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Old Mar 2, 18, 8:29 pm
  #40  
 
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Would love to hear Gordon’s take on this. He was the big proponent of EVERYONE in the company getting a bonus if the targets were met. When an employee asked why folks in the reservation call center deserved a bonus for the on-time metric, he held up the (expensive mechanical) watch on his wrist and said ... “What part of this watch don’t we need”?

Even the smallest screw or tiniest cog makes the watch run.

Kirby is keeping the hands and throwing away the gears. What a horrific idea.
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Old Mar 2, 18, 8:32 pm
  #41  
 
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Originally Posted by jashsu View Post
Scenario A: Employees A, B, C, D, and E all get $100 bonus. Scenario B: Employee E randomly gets a $500 bonus and the rest get nothing. Which scenario do you think is going to cause more bitterness and discontentment?
and will the lottery pool be the same/equal to what they get today?

that luxury car was "valued" at "1 million dollars"
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Old Mar 2, 18, 8:37 pm
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Originally Posted by fly18725 View Post
This does not replace profit sharing. Employees will still get $349 million.

Monthly performance bonuses are usually no more than $100-200.
yeah, who wants up to $2,400 instead of 12 [remote] shots at a car.
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Old Mar 2, 18, 8:51 pm
  #43  
 
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Originally Posted by jashsu View Post
Scenario A: Employees A, B, C, D, and E all get $100 bonus. Scenario B: Employee E randomly gets a $500 bonus and the rest get nothing. Which scenario do you think is going to cause more bitterness and discontentment?
i dunno. A crazy number of people are willing to spend a small amount for a chance to win a large amount. Granted, the ratio is different than your example, but that is true for the UA example, too ($100k was mentioned?). Still I think it is a bad idea because people aren’t given a choice here, unlike with a regular lottery that is also known as a tax on those who are bad at math. And if they wanted to use their traditional bonus to buy lottery tickets voluntarily, there would be nothing stopping them.
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Old Mar 2, 18, 9:24 pm
  #44  
 
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Originally Posted by jashsu View Post
Scenario A: Employees A, B, C, D, and E all get $100 bonus. Scenario B: Employee E randomly gets a $500 bonus and the rest get nothing. Which scenario do you think is going to cause more bitterness and discontentment?
I didn’t say this was a good idea. I was simply pointing out the fact that the more substantial profit sharing is not being replaced.

Originally Posted by anc-ord772 View Post


yeah, who wants up to $2,400 instead of 12 [remote] shots at a car.
I would hope that there was some testing done among employees before rolling it out. Clearly, there are people that don’t like it.
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Old Mar 2, 18, 9:38 pm
  #45  
 
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Originally Posted by fly18725 View Post
I would hope that there was some testing done among employees before rolling it out. Clearly, there are people that don’t like it.
Sure. "Hey, would you be in favor a program where you might win a car or $100,000?"

Not, "Hey, would you like to replace your bonus with an entry into a drawing for $100,000?"
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