United Airlines To Replace Employee Bonuses With Lottery

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"Our intention was to introduce a better, more exciting program, but we misjudged how these changes would be received by many of you", United President Scott Kirby said in a note to employees.

United announced to employees March 2 that the company planned to change its company-wide employee bonuses from a quarterly payment (of up to $375) based on the airline meeting operational goals to a quarterly lottery system, in which only employees with a ideal attendance record could participate.

United Airlines is changing how it rewards employees, and some workers are not happy.

While the bonuses were discretionary and not part of any contract, "it starts to become a counted-on piece of income, and now that income might not be there", said Mike Klemm, whose International Association of Machinists and Aerospace Workers represents around 28,000 United employees.

United Airlines (NYSE:UAL) is forgoing cash bonuses and will instead reward employees by entering them into a lottery in which they have the opportunity to win cash, a vehicle or a vacation, according to the Chicago Business Journal.

The dust-up over the bonus lottery showed that United is struggling to overcome a legacy of poor labor relations since its 2010 merger with Continental Airlines.

The lottery would have caused a majority of the airline's 90,000 workers to lose bonuses that paid up to $1,500 over the course of the year. Employees are said to be pretty displeased with the new approach.

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It felt like we had just gotten to a place where employee morale was up.

Now, United says it is "pressing the pause button" on the program as it reviews employee feedback.

The rewards program also drew ire in more public social-media forms, with some taking to Twitter to question the logic behind it.

Prior to Friday's announcement, all eligible United employees could receive up to about $300 per quarter, or $1,500 per year, a United spokesperson said.

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. "All our hard work to make this company a success if we never call in sick".

Though internal programs should support your organization's mission statement, vision and goals, this crisis can stand as a lesson for communicators to consider employee needs when implementing a program-not just numbers.