News spread over the weekend that United Airlines was ditching its traditional employee incentive program, which provided quarterly bonuses of about $300 for meeting certain performance targets, to something more closely resembling a lottery. Live and Let’s Fly was one of the first to share the prize list:
- $100,000 cash (1 winner)
- Mercedes-Benz C-Class or $40,000 (10 winners)
- Platinum United Vacations package or $20,000 (20 winners)
- Gold United Vacations package or $10,000 (30 winners)
- $5,000 cash (300 winners)
- $2,000 cash (1,000 winners)
With over 80,000 employees, this gives each one about a 0.5% chance of winning. The rationale given by Scott Kirby, President of United Airlines and former American Airlines executive?
The reason for this change goes to the heart of our strategy: offering meaningful rewards will build excitement and a sense of accomplishment with more bang for the buck.
We want every United team member to picture themselves walking home with a grand prize, or driving home in a beautiful car that announces for all to see that you are committed to your success and ours.
But employee pushback was severe: arguing that the rewards were essentially random, didn’t meaningfully link rewards to performance, and would only sow resentment toward those who pull up to work in a fancy new car. That’s why, on the first business day after the announcement, United is already putting the plan on hold.
We talk a bit about incentive programs and how to motivate employees in my MBA program. But I also have a degree in behavioral psychology. I’m not surprised by the pushback at all. If you want to train a lab animal, start with predictable awards that link behavior and response. Even when the desired behavior is obscured (imagine a cage with 20 different levers and buttons, of which 19 do nothing and one delivers a treat), animals will quickly figure it out.
On the flip side, punishments that happen for no reason at all and which provide no way to escape or resolve the situation create a situation known as “learned helplessness.” Failing to win a lottery isn’t exactly a punishment, but I can see how watching others win big prizes for the same work while you get nothing might be perceived in the same way.
United Airlines basically created a perfect means to create depression and discord among its employees. I’m frankly surprised that the lottery has only been paused and not completely thrown out the window.
This article was originally published on Travel Codex. Read it at United Airlines Walks Back Foolish Changes to Employee Incentive Program.
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