United Airlines Replaces Bonuses with a Lottery

> A new report says [United Airlines] plans to do away with quarterly employee performance bonuses--and replace them instead with random drawings for prizes like like cash, automobiles, and vacations.

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How will this encourage employees to perform admirably? After David Dao's beating and forced removal from a flight, this seems like quite a poor decision.

Re: United Airlines Replaces Bonuses with a Lottery

#6

Post by drozycki » Mon, Mar 05, 2018, 6:33 AM UTC

purplezooey wrote: post #3

It seems tailored for social media. "look at me I won". A lot of things are going this route. dumb.

The execs probably hope to leverage irrationality around games of chance. This will provide net morale at a lower program cost. It's good that this innovation will be nipped in the bus before it spreads across corporate America.

Re: United Airlines Replaces Bonuses with a Lottery

#7

Post by iamleppert » Mon, Mar 05, 2018, 6:34 AM UTC

This was done to try and boost morale and make United a more caring airline? It looks like an attendance and compliance program in disguise.

How could people at the top be so inept at such basic principles of human psychology? The only explanation is that Oscar Munoz is a complete sociopath and cares nothing about his employees, or company for that matter. Makes absolutely no sense at any level and will only lead to long term damage to the company.

The net effect is that those people who actually tried harder in their job because of the bonus will feel no such desire after the first few times they don’t “win”. Those that do win will know it was pure luck and nothing in their actions or performance contributed to the winning, so it won’t change their performance either.

Re: United Airlines Replaces Bonuses with a Lottery

#8

Post by hinkley » Mon, Mar 05, 2018, 6:35 AM UTC

noonespecial wrote: post #2

You've just got to shake your head and wonder if the "management" who thought this might be a good idea have ever met any actual human beings.

How's your fiction writing? I think you have the basis of a dystopia where AI replaces management and nobody notices they're robots until it's too late.

Re: United Airlines Replaces Bonuses with a Lottery

#9

Post by sk5t » Mon, Mar 05, 2018, 6:37 AM UTC

iamleppert wrote: post #7

This was done to try and boost morale and make United a more caring airline? It looks like an attendance and compliance program in disguise. How could people at the top be so inept at such basic principles of human psychology? The only explanation is that Oscar Munoz is a complete sociopath and cares nothing about his employees, or company for that matter. Makes absolutely no sense at any level and will only lead to…

Moreover, it is a very dim-witted program. sub-2% chance of a reward? Take a sick day and lose elgibility? Welcome to an environment of malicious compliance, UA.

Re: United Airlines Replaces Bonuses with a Lottery

#10

Post by bcherny » Mon, Mar 05, 2018, 6:44 AM UTC

This is a super interesting piece of behavioral economics in action.

We know from Prize Linked Savings Accounts that people prefer a really small change of winning a lot to a really high chance of winning a little. [0] [1]

> The new program replaces that system with a lottery. If United meets its goals, all employees would have a chance to win prizes, including Mercedes automobiles and cash up to $100,000. About 1.6 percent of employees would win something.

If I recall, there was a study that showed that people were happier when given a paid vacation than when given an equivalent bonus.

[0] http://www.hbs.edu/faculty/Publication%20Files/08-061_17c22e...

[1] https://www.sciencedirect.com/science/article/pii/S016726811...