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United is cutting bonuses and asking employees to enter a lottery for $100,000

Chief flight attendant Han Juanjuan (L) and her colleague Wang Xin (R) clean the cabin of a China United Airlines aircraft after it landed at the Nanyuan Airport in Beijing, China, December 4, 2015. Picture taken December 4, 2015. To match CHINA-AIRLINES/LOW-COST REUTERS/Jason Lee - GF20000084624
Reuters/Jason Lee
High risk.
By Amy X. Wang
Published Last updated This article is more than 2 years old.

Employees of United Airlines used to get quarterly bonuses if they hit certain performance targets. Now, they’ll all be entered into a lottery, out of which one—and only one—lucky person will win $100,000.

United president Scott Kirby broke the news in a memo on March 2, calling the change “an exciting new rewards program.” He noted that, in addition to the $100,000 award, quarterly prizes would also include luxury vacations, smaller cash awards, and Mercedes-Benz C-Class sedans. Instead of getting individual bonuses each quarter, workers who achieve their performance goals will be all entered into the drawing, from which winners will be chosen at random.

The change is not sitting well with employees themselves. Some of them told Chicago Business Journal that Kirby’s memo “quickly ignited a firestorm” among rank-and-file workers, and Bloomberg reports that union members say they’d rather have a shot at bonuses that are much smaller and surer than entry into a chance lottery. “No team-oriented reward should be dictated by lottery,” Craig Symons, the president of United’s flight dispatchers union, said to Bloomberg. Spokespeople for the airline counter that the new program builds “excitement and a sense of accomplishment.”

United—which happens to be the lowest-ranking airline in America by customer satisfaction—is gambling with its swap-out of bonuses for a prize drawing: It is assuming that the new program will still motivate its 86,000 employees to want to hit their on-time operational metrics, which ultimately translate to the airline’s output and performance. Studies are divided on whether employee bonuses really work—but there apparently isn’t management research on the efficacy or psychological effect of a lottery.

Update, March 5: After thousands of complaints were made on the Facebook and the company’s internal website, Kirby sent a message to employees noting that United is “pressing the pause button on these changes to review your feedback and consider the right way to move ahead.”

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