United Airlines backs down on plan to replace employee bonuses with 'lottery'

United Airlines backs down on plan to replace employee bonuses with 'lottery'

"Our intention was to introduce a better, more exciting program, but we misjudged how these changes would be received by many of you", said Scott Kirby, president of United Continental, the holding company for the airline, in an email to employees.

United Airlines is "pressing the pause button" on a rewards system that would have disbursed bonuses via lottery.

The lottery, which the airline announced on Friday, would have paid $100,000 to one lucky employee selected at random, and smaller bonuses of $2,000 or $5,000 to about 1,300 more.

United, which has more than 80,000 employees, did not respond to specific questions about either the lottery program or the current bonus program.

The system would have replaced quarterly, performance-based bonuses and rewards for ideal attendance with a lottery-based system, where eligible employees would be entered into a drawing for a variety of prizes if the company hit one of its performance goals during a calendar quarter.

The "exciting new rewards program" was to have replaced quarterly bonuses with the chance to win $100,000, vacation packages and even a luxury auto.

However, the new prize program has reportedly enraged United Airlines' employees as it implies that team efforts will not be recognized and only one employee determined by a drawing will receive the $100,000 prize.

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The proposed lottery system - which offered prizes ranging from a Mercedes sedan to a one-person $100k payout - would've only affected 1,361 employees, and cost the company around $18m.

These were posted on the internal United Airlines employee website, Flying Together. "While we were surprised by some of the components of the program, there is no part of the reaction by flight attendants and other employees that surprises us". The video of the incident had sparked outrage on social media.

So, we are pressing the pause button on these changes to review your feedback and consider the right way to move ahead.

As detailed in United's recent 2017 fourth quarter earnings release, the company distributed approximately $30 million in earned incentive payments for achieving operations performance goals during the quarter.

Instead, the airline will be reaching out to employee work groups to make changes that "better reflect [employee] feedback".

Deb Garbor, chief executive of Sol Marketing, says United executives "clearly didn't think through their how employees might react, and they didn't hold their own corporate culture in high regard".

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