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.