United Airlines Under Fire For Bonus Lottery

United Airlines parent company, United Continental Holdings Inc. (NYSE: UAL), has announced that it is rethinking its plan to replace its modest monthly employee bonuses with a lottery system. The new plan would have offered large rewards to a few workers at random instead of giving all eligible employees smaller rewards. Scott Kirby, the president of United, wrote in a statement, “Our intention was to introduce a better, more exciting program, but we misjudged how these changes would be received by many of you.”

The new lottery-style system was originally announced late last week. Under the new system, only workers with perfect attendance records for the quarter would be eligible for the rewards. The big prizes included $100,000 cash and a Mercedes-Benz C-Class sedan. The bonus that employees had the best chance of winning was $2,000 cash, which would have been given to 1,000 workers.

The current performance incentive program awarded workers up to $375 for each quarter that operational goals for the airline were met. All eligible employees would get up to $125 each month for on-time departures, on-time arrivals and other performance-related measures. United’s flight attendants, pilots, and gate agents, among others, could receive the bonuses. In February, United Airlines finished first among its competitors for on-time departures.

The move to a lottery system would have saved the airline a lot of money. According to United’s latest earnings report, employees earned approximately $30 million in incentive payments in the fourth quarter ending in December. For 2017, the employees received approximately $87 million in earned bonuses. United currently has more than 80,000 employees.

The lottery system would have had about $18 million in rewards per year available. Under the system, only 1,361 employees would receive bonuses and only one would be chosen for the top cash prize of $100,000.

The company faced a swift backlash from employees. A discussion on the airline’s internal forum included hundreds of comments about the lottery. The Association of Flight Attendants said that employees were “entirely opposed to and offended by this new ‘select’ bonus program.”

Some employees signed an online petition condemning the decision. The petition, called “Make United Airlines Great Again,” drew more than 1,000 signatures on Change.org before it was closed a few of days ago by the person who created it.

United has not said how it plans to modify the proposed lottery bonus system or whether the plan will be scrapped altogether. United spokeswoman Maddie King said, “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.”

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