United Replacing $300 Performance Bonuses With Quarterly Reaping

United Airlines sent a memo to employees yesterday telling them they would no longer receive their quarterly bonuses of up to $300.

Instead when United hits at least one of four performance metrics they all get entered in a lottery.

As we look to continue improving, we took a step back and decided to replace the quarterly operational bonus and perfect attendance programs with an exciting new rewards program called ‘core4 Score Rewards’

These are rewards for performance of the whole team, but most employees won’t receive anything anymore. A few employees will receive a lot. In total simple back of the envelope math suggests the total cost to the airline will be a small fraction of bonuses. And that means the expected value for any individual employee is far lower.

The prizes are a Cadillac Eldorado and a set of steak knives “cash ranging from $2,000 to $40,000,” ten Mercedes Benzes, “vacation packages, and a grand of prize of $100,000.”

Here’s internal video of Scott Kirby announcing the new compensation contest to employees, smuggled out and leaked at great risk.

United believes replacing quarterly bonuses for employees of up to $300 with a reaping 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.”

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. I take it someone in management slept through behavioral economics. Gordon Bethune, I think, had a similar lottery program with free cars etc., but I believe his program was preceded by no incentive bonus whatsoever. You see this stuff in union shops where management and labor take turns sucking each other dry when they can.

  2. There’s certainly nothing wrong with tying the bonus to performance metrics but the lottery is obviously the wrong way to do it.

    What would the C-suite think of their performance was given via a lottery system?

  3. Actually, if you read Gordon Bethune’s book, “Worst to First,” you’ll see they gave monthly bonuses to every employee when Continental hit top 5 in on time performance. I think it was $65.00 per month. They also had a semi annual drawing for Ford Explorers, 10 I think, for every employee who had perfect attendance for the previous six months.

    This seems to be an amalgamation of the two in an attempt to save more money.

    United is now devaluing the airline experience for its employees. The Americanization of United continues.

    If a company treats its employees poorly, its employees will likely return the favor to its customers.

  4. I work at a Marine port, and we are unionized and have something similar. Essentially, at the end of the year, everyone who managed to not get into an accident – Big or small, gets a “Safety Check” – It’s like maybe 300-400$ or so, and for all who qualify, they have a drawing at Christmas, and the winner gets a Denali. 300-400$ is less then a days pay, but people still make sure to be extra safe to qualify, and mention it often during the year.

    Point – These things can be effective. However, losing a quarterly bonus.. even a small one, is going to piss people off. Guaranteed money for being a good employee VRS Gambling.. with zero being the most likely result… Is just no way to make current employee’s happy. If it were April, I’d think this to be a fake news post.

  5. Here’s a thought…take some of that record profit over the past few years and instead of doing share buybacks, increasing executive comp, etc. – keep the quarterly bonuses AND do this stupid lottery system too.

    Or at least fix the g.d. Denver catering at a minimum.

  6. Why not eliminate everybody’s pay, including Scott Kirby’s pay. You can have everybody work for free, then have a lottery. One lucky winner can get a billion dollars. The other employees do not need money to survive, they can sleep at the airports and eat leftovers from the fabulous airline food.

  7. If employee s want to show what they think of new policy they should do a work slowdown, if every flight left just 17minutes late it would low impact on customer s but remind management who really operates the airline

  8. I want to work where Manger works and make $16,000.00 a week!

    What Marine port do you work at, Manger? I wouldn’t have to worry
    about getting my bonus if I worked with you.

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