In a prepared interview two weeks after United bashed a paid, legally seated passenger last April, the CEO, Oscar Munoz uttered one of the more tone-deal statements in recent PR history, "Sometimes we forget that the people we are carrying are human." And before that, Munoz and United had blamed the passenger. So it is no wonder they come in near the bottom in customer service ratings, only above Spirit and Frontier - not exactly a high bar.
Humans? What Humans?
Now, apparently they have forgotten the same thing about their staff. Just announced - quarterly incentives are going away and will be replaced with a lottery system for prizes and cash that mimics The Price is Right, except you don't even get to make a guess as to your prize. Under the new lottery system, the majority of people who met or exceeded their quarterly metrics will receive nothing, only to hope the right lottery balls drop so that a few of them might get some cash, a car or a cruise.
United's President, Scott Kirby, is calling it "an exciting new rewards program...to build excitement and a sense of accomplishment." From the reaction of United's people, that's like calling gravity uplifting.
But there are bigger problems than just the fact that United has once again ignored the human factor in their business. It simply makes no business sense.
The Business Case?
Research is clear. Salaries do nothing to increase engagement, personal incentives increase engagement an average of 19%, and team incentives increase engagement a whopping 48%. When we're incentivized to make everyone around us better, the company makes more money.
This newly announced lottery system ignores both personal and team incentives and instead treats workers like contestants on a game show. We could ask how United sees a long-term benefit from this program, but that's the lesson here - United doesn't think long-term. Based on their track record for ignoring long-term customer service issues and the future of their brand, if they can squeeze a few more dollars out of the next few quarters, it must be a good decision. It's not an incentives program. It's a cost-cutting, profit-making program.
What We Should Learn
There are three lessons for us here:
1) Short-term thinking can save you a few bucks right now, but it will always cost you in the end. United has an "expense" mindset for all money leaving their bank. If they were thinking long-term, they would see some of it (including results-based incentives), as investments, not expenses. Make sure you differentiate between the two.
2) Don't institute "incentive" programs without finding out if it will actually incentivize. After a keynote I did in December where I mentioned lousy incentive programs, a woman told me she had won the "Steak of the Month" club for a year. She appreciated the gesture, but she's vegan. So not a big incentive - maybe even a disincentive. Don't go all paternal on people and give them things they don't want. Include those being incentivized in developing a plan that will actually motivate them.
3) Good Profit vs. Bad Profit - related to #1 - good profit makes people (and staff) motivated to want to come back and do it all over again. Bad profit makes you want to warn your neighbor and find an alternative next time. United is famous for bad profit - don't get caught up in taking advantage of people in the short term this way.
But again, this really wasn't about incentivizing their staff, or they would have done a simple survey and come up with something better. For United, this is all about short-term profits, and it's easy for them to do it, because not only have they forgotten the people they carry are human, they're applying that internally now, too.
Don't get caught in the trap of short-term thinking, unwanted incentive plans, or bad profit. It will eventually, if not very quickly catch up with you.