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United Airlines walks back new bonus-lottery system that angered employees

United Airlines reversed plans to begin awarding employee bonuses through a lottery system that angered workers. The changes would have handed out much larger bonuses — including vacations and luxury cars — but to only a fraction of its workers. (Mar. 6, 2018)

United Airlines on Monday reversed plans to begin awarding employee bonuses through a lottery system — a plan that had angered employees.

Scott Kirby, president of the Chicago-based airline, said that after hearing employees' feedback since announcing the changes late last week, United was "pressing the pause button" on changes that would have handed out larger bonuses but given them to only a fraction of its workers.

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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," Kirby said in a Monday letter to employees.

Kirby said that the airline would reach out to employee work groups and that changes made would "better reflect your feedback."

Kirby had announced the new system in a note to employees late last week. The lottery-style program was called "core4 Score Rewards," according to employees and union officials. It was a departure from the previous system, under which each employee could receive a bonus of up to $300 per quarter if the company hit certain operational targets.

The core4 system called for a small number of eligible employees to receive prizes — including cash from $2,000 to $40,000, luxury cars and vacations — per quarter. A single employee would receive a grand prize of $100,000 under the plan, media reports said.

United has more than 80,000 employees, although not all of them are eligible for bonuses. Airline spokeswoman Maddie King said that frontline employees — those who deal directly with customers — and some members of management would be eligible for the bonus program.

King said the company doesn't have a timeline for reevaluating the bonus program.

"Right now we are going to collect feedback from our employees to make sure we can create a new incentive program that will be meaningful to employees as we continue running a great operation and providing excellent customer service," she said in an email.

After the memo was released, a petition was created on Change.org deriding the new system. The petition was addressed to the airline's management and signed "United Airlines Flight Attendants." Flight attendant Laurie Vesalo confirmed that she wrote the letter, which called the new lottery system "deplorable," but said that someone else posted the letter on the petition website. The petition received more than 1,100 signatures before the poster, who is anonymous, commented: "I was told to take down this petition. Great job everyone but I'm sorry."

In a statement after Monday's reversal, the Assn. of Flight Attendants said it was "encouraged to see that United management has taken flight attendants' feedback seriously and decided to pause any changes." Earlier, the union had said that employees were "entirely opposed to and offended by this new 'select' bonus program."

Airline industry experts questioned the new system and its impact on employee morale.

Seth Kaplan, managing partner of Airline Weekly, said he couldn't recall another case where an airline swapped regular cash bonuses for a lottery system, "which I think is the problem," he said. "If the idea is to motivate people, it doesn't seem to be having its intended effect."

Henry Harteveldt, travel industry analyst and president of Atmosphere Research Group, said he thought United had focused too much on the potential cost savings and failed to consider the move, given the potential to divide employees and potentially affect customer service.

"You can't tell people if all of you do a good job, a percentage of you win," he said. "It's exactly the wrong message to send."

Although $300 might not go a long way, "employees don't want to lose something that makes a difference."

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UPDATES:

3:05 p.m.: This article was updated with comments from a United spokeswoman and from the flight attendants union.

Noon: This article was updated with additional details about the planned lottery system and reactions to it, and with comments from airline officials, employees and experts.

This article was originally published at 11:15 a.m.

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