Faced with a backlash from employees, United Airlines said Monday it was “pressing the pause button” on a plan to replace its modest monthly bonuses with a lottery system that would have offered large rewards to a few workers at random.
Last week, an internal United Airlines memo, first obtained by The Chicago Business Journal, announced that the company was doing away with a performance incentive program that awarded workers up to $375 for each quarter that the airline met operational goals.
Instead, employees would enter a lottery system that doled out big prizes, including $100,000 cash and a Mercedes-Benz C-Class sedan. Only workers with perfect attendance records for the quarter would be eligible.
Employees were furious, signing an online petition condemning the decision and voicing their concerns in an internal company forum.
Rewarding a small number of employees at random would be “unfair and unjust,” wrote one petition signer who identified herself as a former United worker in Denver.
“When no one ‘qualifies’ because they called out sick due to the most awful flu in years, or sick children, or life … the company just makes more money for itself,” she wrote. “Service is going to lack, on time departures won’t be fought for and the company will suffer.”
On Monday, the president of United Airlines, Scott Kirby, told employees that the company was rethinking the lottery program.
“Our intention was to introduce a better, more exciting program, but we misjudged how these changes would be received by many of you,” he wrote. “So, we are pressing the pause button on these changes to review your feedback and consider the right way to move ahead.”
United, which has more than 80,000 employees, did not respond to specific questions about either the lottery program or the current bonus program.
That program rewards all eligible employees with up to $125 each month for on-time departures, on-time arrivals and other performance-related measures.
“The employee group that would have been eligible for those bonuses was much larger” than that of the lottery system, Taylor Garland, spokeswoman for the Association of Flight Attendants, said in a phone interview. The bonuses were not only given to United’s 24,000 flight attendants but also its pilots and gate agents among others, she said.
Under the lottery system, just 1,361 employees would receive bonuses, according to the United Airlines memo, and only one would be chosen for the top cash prize of $100,000.
Other prizes included the Mercedes sedans (10 winners), a choice between a vacation package or $20,000 (20 winners), a similar choice at the $10,000 level (30 winners) and a variety of other cash prizes. The bonus that employees had the best chance of winning was $2,000 cash, which would have been given to 1,000 workers.
In February, Mr. Kirby lauded the company for finishing first among its competitors for on-time departures, “marking the seventh time in the past 10 months that we’ve ranked in the top spot for mainline departures.”
Paying out bonuses to both rank-and-file workers and executives costs the company tens of millions of dollars every year.
According to United’s latest earnings report, employees earned approximately $30 million in incentive payments for achieving operations performance goals in the fourth quarter ending in December, and approximately $87 million in earned bonuses in 2017. The report did not break out bonuses for executives and other workers.
The lottery system, with about $18 million in rewards per year available for rank and file workers, may have cost the company far less.
In response to the lottery plan, an online petition called “Make United Airlines Great Again” surfaced on Change.org last week, drawing more than 1,000 supporters, but it was closed a couple of days ago by the person who posted it, who is identified online only as “N A.”
It featured a letter addressed to the United Management Team written by Laurie Vesalo, a flight attendant, who referred to the lottery as a “deplorable new system that only rewards an elite few.”
Ms. Vesalo told The New York Times that she did not create the petition and that her letter had been intended for internal company use — not a public complaint.
“I roll with the punches, but I also believe in standing up for what I believe,” she said. “I will still always do my job adequately, and I love my job.”
Many of those who signed the petition chastised the company for treating its employees unfairly.
“You have the opportunity to do the right thing. WE are the face of your company. The morale is horrible and keeps getting worse. We feel like we’re not being heard and the tension is palpable,” one worker in Los Angeles wrote.
A discussion on the airline’s internal forum, obtained by the travel website The Points Guy, included hundreds of comments about the lottery.
“I haven’t seen or heard one positive comment from a front line employee regarding this ‘new and enhanced’ program,” one person wrote. “Upper management is so out of touch with the front line, it would be funny if it weren’t so sad.”
For now, United’s website still promotes the employee bonuses as a reason to come work for the company.
“Our employees are critical to our success,” the webpage said, “so we reward them financially through profit-sharing, customer satisfaction bonuses and on-time arrival bonuses when the airline performs well.”