Back in April 2017, I wrote about a huge PR fiasco that United Airlines brought upon itself after the release of video footage showing a screaming 69-year-old man being violently removed from a plane so United could seat one of their own employees. This incident was appalling enough, but then CEO Oscar Munoz decided the best way to manage communications around this was to embark on a campaign in which he blamed the passenger, used corporate jargon to obfuscate, and generally came off as belligerent, out of touch, and (deep down) hostile to his own customers. The public replied by chopping off nearly $900 million from the company’s market cap.
Well, United Airlines is apparently the gift that keeps on giving, because earlier this year it was the turn of President Scott Kirby to present a shameless and inept case study of How Not To Do Things. Where Munoz offered an example about external communications (crisis management), Kirby’s was focused on internal communication (employee engagement).
Some background: United had initiated a “Core4” program, which enlisted employee effort in, and commitment to, improving certain performance metrics that United management felt would help the airline build a reputation as “the most caring airline in a highly-competitive industry.” Since the role of nearly every United worker directly or indirectly impacts customer experience, the airline really needs strong employee engagement and buy-in to even come close to this objective.
Communication is key to building that kind of engagement. Not just leader videos and emails, by the way, but the full range of outreach, since any action from management toward employees qualifies as communication. When they are tasked to do “better” to help their employer “improve,” workers pay attention to anything that lets them know how authentic and transparent management is being.
So here is what United did. On Friday, 2 March 2018, Kirby sent out a memo to United employees that announced a change in how bonuses would be distributed. Previously, employees could receive a total of $125 a month – a max of $1,500 per year – if United met its goals on several important metrics. With Kirby’s announcement, United would replace that program with a lottery. If United met goals for a quarter, employees would be given a chance to win prizes, including automobiles, vacation packages, and cash from $2,000 to $40,000. One grand prize per quarter of $100,000 would also be given. All of this would be done by lottery, and only about 1.6 percent of workers would win anything. Horrifying, yes, but there’s more! To be eligible for a drawing, employees would need to have perfect attendance during that quarter, meaning no sick days (I assume that didn’t apply to workers taking vacation time, but with United you can never be sure).
By the way, they named the lottery program “Core4 Score Rewards,” tying it directly to the performance and service improvement program Core4. Since what better way for a service company to continue improving service than to de-incentivize those providing the service? What better way to encourage engagement than taking away the reward system and replacing it with a role of the dice where 98.4 percent of workers will receive no reward at all? What better way to communicate to your employees exactly what you think of them?
Writing as someone who has been an employee, who has managed teams large and small, and who has been a business owner with the desire to keep engagement up and turnover down, I have to say that United’s lottery program is one of the dumbest ideas I’ve ever heard in the business world, and that’s saying a lot.
Making it worse through communications
The condescension in United’s communications to employees and to the industry media was breathtaking.
Why did they do this? In his memo, Kirby said, “I couldn’t be more proud of our performance in 2017. We set all-time records in almost every operating metric.” So he uses the first-person plural to include everyone within the company in this achievement, even as he takes away worker benefit. “As we look to continue improving,” Kirby goes on, “we took a step back and decided to replace the quarterly operational bonus…” Note that now the “we” doesn’t describe the entire company, but just a small cabal of leaders, who “decided” to do this. No, Mr. or Ms. Employee, we didn’t ask your opinion.
“The reason for this change goes to the heart of our strategy,” Kirby explained. “Offering meaningful rewards will build excitement and a sense of accomplishment with more bang for the buck.” The “heart” of their strategy, apparently, is the reduction of overhead costs by the removal of actual, meaningful sharing of rewards. Then replacing it with a game of chance more suitable for a carnival, which will give most workers nothing, but save management a lot of money. This is the “more bang for the buck” Kirby is talking about; not your buck, to be clear, but his buck.
To make things worse, Kirby seems to believe that United employees are incapable of thinking things through, that they would be easily distracted by the lure of a shiny prize that they have little chance of getting. Calling it an “exciting new rewards program,” Kirby said: “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.”
This is the kind of language hucksters use when trying to sell you a timeshare or a powerboat that you neither want nor need. Note how he splits the company at the end, that “your” success as an employee of United is connected to but distinct from “ours,” that is, the success of its management team. Kirby inadvertently makes it explicit: management and workers are not in this together. We don’t want your collaboration, these communications are saying to employees, we don’t even want your engagement. We want your compliance.
“It seems that United’s management really did think that its employees would give up a guaranteed bonus in favor of a raffle ticket,” wrote Chris Matyszczyk in Inc. “Did no one at United imagine that the employees might see through all this?”
The attitude towards employees was also strongly communicated by the requirement that workers needed to have a perfect attendance record – that means no sick days – to be eligible for that quarter’s lottery. “Clearly we don’t want anyone to come to work who is legitimately sick,” said United VP of Human Resources Anthony Scattone, “and while it may make you ineligible one quarter, you’ll likely be back the next.” You worked really, really hard all quarter but you missed a day from the flu your kid brought home? C’est la vie, baby. (Special bonus points for Scattone’s inclusion of the word “legitimately,” a nice touch of condescension and distrust.)
It is at this point that, in another article, I might feel the need for a little balance, to write something like, “To be fair, United is sincere in their desire to build enthusiasm among their staff… blah blah blah.” But this program is so transparently self-serving and exploitative, and the communications in support of it so crass and misleading, I can’t bring myself to do it. Based on what they say and how they say it, I don’t think they are sincere at all.
Response was swift and unified from employees, who detested this new program. As one worker put it on United’s internal employee forum, “I haven’t seen or heard one positive comment from a front line employee regarding this ‘new and enhanced’ program. Upper management is so out of touch with the front line, it would be funny if it weren’t so sad.”
Reminder: a brand is 360 degrees
Industry observers and journalists were likewise astonished by the incredibly bad lottery idea, and the tone-deaf way it was communicated. Marketers, communicators, and brand experts were stunned by how the airline once again seemed unable to understand how to nurture its own brand, and its critically important relationship with its workers and customers.
“A brand exists in 360 degrees around a company and inside and out of it,” notes Deb Gabor, CEO of brand strategy consultancy Sol Marketing. “In many respects, a company’s culture is indelibly intertwined with the company’s brand. The two can’t exist separately. If United wants to solidify its reputation as the ‘most caring airline in a highly-competitive industry,’ they need to look at that vision as a promise to customers, employees, and even investors. When United announced its lottery bonus program, it broke its promise to employees. But more importantly, it broke its promise to its customers, by creating a system in which employees aren’t incentivized to deliver experiences that reinforce the company’s promise to customers.”
And all the communications from leadership made that clear, reinforcing the perception that they didn’t care about either employees or customers. As Gabor says, “United seems to be doing everything wrong.”
By Monday, 5 March – just three days after announcing the lottery bonus program – President Kirby rescinded it. The backlash had been so fierce that the dropping morale and rising resentment among employees were likely to damage any improvements in operational metrics that Kirby and company were focused on.
Originally published on LinkedIn on 4 September 2018.