When United Airlines gets tired of mugging its customers, they’ve always got their employees to batter.
The latest news out of the Sears…er…Willis Tower (sorry, I still call 200 Park Avenue the Pan Am building) is that United’s executive brain trust tried to eliminate a longstanding performance bonus plan and replace it with a lottery.
For years, employees and their teams who met or exceeded certain performance metrics received quarterly bonus payments. Over the course of a year, that could add up to as much as $1500 per employee. But a few days ago, United President Scott Kirby breathlessly announced that the company was abandoning that program and replacing it with a lottery that would reward one employee per quarter with a $100,000 windfall. A few other employees would win consolation prizes such as vacations or cars. But the vast majority of United employees would take home…a pay cut.
Now, it’s not hard to understand why United would like to ditch the bonus plan. United has 86,000 employees. Let’s say for the sake of argument that 50% are eligible for the performance bonuses. Let’s further assume that the average annual payout per employee is only $500. That would put United on the hook for $21,500,000 per year. Just imagine if United could reduce that number to less than a million dollars per year. How much of the remaining $20 million would end up in executive paychecks?
Alas, we’ll never know. Just a few days after the announcement, Scott Kirby was forced to withdraw the plan after United’s employees strenuously objected. “Our intention was to introduce a better, more exciting program but we misjudged how these changes would be received by many of you,” he said in a note to employees.
Really? That’s quite a misjudgment. Maybe not as bad as misjudging the number of feet between a plane and a runway, but still, it seems hard to believe that he expected already underpaid flight attendants to take a pay cut with a smile.
I should note that United is hardly alone in its cluelessness. In a previous post, I spotlighted IBM’s plan to charge employees for participating in professional development programs, and in recent years, Walmart, Starbucks, Whole Foods and many others have imposed policies or changed working conditions in ways that seem calculated to piss employees off.
One has to conclude that these are the actions of people who are so swaddled in their corporate security blankets that they simply have no idea of what is or is not a good idea.
I’m fond of the expression, “Every problem started out as a solution.” In United’s case, the potential recovery of a sizeable chunk of change (although in the context of 2017 net income of $2.1 billion, maybe not so sizeable) blinded its executives to the unintended consequences.
United’s self-inflicted embarrassment could have been avoided had they employed a state-of-the-art technique others have used with great success: Asking employees what they think before rolling out a new program.
And don’t ask Human Resources to do it. They’ll come back and tell you employees actually want a bigger pay cut and longer hours. Get out on the line and ask people what they think about your plan before you announce it to the world.
I know, crazy, right?
Categories: Random PR Thoughts