The mess started last weekend when Chicago Business Journal obtained a memo sent by Scott Kirby, president of United Airlines, to United's employees. In the March 2 memo, Kirby announced that the company is slashing quarterly bonuses for employees that hit their performance targets.
In its place, Kirby said a new program called "core4 Score Rewards" has been implemented, which allows all employees to be entered into a lottery for a chance to win prizes like luxury vacations, smaller cash awards, and Mercedes-Benz C-Class sedans. Oh, and then there's that one grand prize of $100,000, awarded to one lucky person.
That apparently leaves the rest of eligible employees with nothing to show for their contributions and for hitting their performance goals.
According to the Business Journal piece, Kirby's memo "has quickly ignited a firestorm." Inc. colleague Bill Murphy captured the eye of the storm in his Inc. column after a United employee sent him hundreds of comments posted on the internal United Airlines employee website, Flying Together. (Murphy posted seventeen of those reactions).
Here's a sampling of those comments:
"I would be embarrassed and mortified to win this lottery. If it was possible I wouldn't allow my name to be released and I would give my 'winnings' to the Flight Attendant AFA Cause Charity. I win at the expense of tens of thousands of fellow employees? No thanks," wrote one flight attendant.
"I can't imagine driving the Mercedes into the employee lot while everyone around me that worked just as hard, or harder got nothing. I would feel like such a jerk. It's quite telling about the people who thought this up. I bet they would be gloating happily if they won," wrote another flight attendant.
Experts on compensation and workplace culture told CNN Money they had never heard of a company of United's size and stature trying this kind of lottery program. "I really thought it was a joke when I first heard of it," said Tom Gimbel, founder and CEO of LaSalle Network, a national staffing and recruiting firm. "It's very amateurish."
The second memo -- a different story.
On Monday, the thunderous voice of thousands of unhappy employees apparently won over Scott Kirby. Bill Murphy reported on a second email Kirby sent out, backing off from the first one:
Dear United colleagues,
Since announcing our planned changes to the quarterly operations incentive program, we have listened carefully to the feedback and concerns you've expressed.
Our intention was to introduce a better, more exciting program, but we misjudged how these changes would be received by many of you.
So, we are pressing the pause button on these changes to review your feedback and consider the right way to move ahead. We will be reaching out to work groups across the company, and the changes we make will better reflect your feedback.
For whatever reason, it's obvious that the decision to roll out the lottery-based bonus system didn't go through the proper checks and balances and ensure buy-in from all stakeholders, employees included.
By backtracking and "pressing the pause button," Kirby demonstrated one unique feature of good leadership under crisis.
The leadership lesson: Stop, listen, take corrective action.
Kirby got lambasted by most of the near 90,000 of his own employees (and the media) on an ill-advised management decision. Then, he did what good leaders do: He listened to those affected, took the hits from the massive negative feedback, and created positive movement to rectify a bad situation on behalf of all individual contributors.
While this story is ongoing and far from over, by doing what he did, he was able to regain some of the trust that he lost from employees who felt angry and betrayed.
In Bill Murphy's report on Kirby's second email to employees, gratitude was found everywhere for the change in direction.
"Scott, Thank you for listening and including all the stakeholders in the decision," stated one captain of a B-737.
"Thanks for listening... We can all do better when we learn from our mistakes... we got your back if you got ours!" said another pilot.
Empathy: The catalyst to his second email.
Lets not forget one final leadership lesson Kirby demonstrated: Empathy. A lottery scheme seems a rather insensitive and unempathic management tactic to save the company money (from paying out bonuses) and "motivate" some employees at the expense of many.
By stepping back to process the mess he and his management team created, and listen to the many voices of people in the trenches, lets admit one thing: Kirby did come to his empathic senses and felt the heartbeat of his employees -- what they were feeling.
His empathic response in the second email, sent only three days later, showed the type of courageous response where you imagine the world, or a situation, from someone else's point of view rather than your own. That's empathy; that's what great leaders do.
Now the world will be watching with interest to see what Kirby does once he presses the "unpause" button.