Most travelers are familiar with the logistical perils of air travel. What frequent flyer hasn’t dealt with delays, cancelations, missed connections, lost baggage or one of the many disruptions that can leave customers feeling stressed and frustrated? While it’s not always easy to maintain perspective when something’s gone awry, airline and airport employees work diligently, often in stressful situations, to keep things moving. Recently, several airlines encouraged their employees to take it to the next level with incentive compensation packages based on productivity and successful flight experiences. This win-win-win for airlines, employees and customers is already producing tangible benefits.
United Airlines rides incentive compensation to profits
United Airlines recently reported that it netted more than $1 billion in net income in 2013, an 84 percent year-over-year increase from 2012 numbers. The company attributed part of this growth to a high rate of on-time flights, with 79.3 percent of its domestic and international flights staying on schedule. It also said that much of the credit should go to its employees, who participated in an incentive compensation that tied extra cash to the number of flights that stayed their course. Overall, United employees collectively earned $54 million in cash incentive payments in 2013. The airline was also able to invest in its customer service training program, ensuring that more traveler interactions will be productive, efficient and satisfying.
American Airlines debuts incentive compensation project
Perhaps taking its cue from its competitor in the skies, American also announced that it was implementing an incentive compensation plan that would give workers up to an extra $150 per month for industry-best operation, the Star-Telegram reported. The creatively titled Ops Olympics will take various operational procedures into account, including on-time plane arrivals, baggage performance and traveler satisfaction. Employees receive gold, silver or bronze “medals” – and cash – if American outperforms its competitors in these categories.
“[L]et’s get ready to compete,” American chief operating officer Robert Isom wrote to employees. “We have a long race ahead of us against fierce competition, but I know that we are up to the challenge if we work together.”
Building your own loyalty program
Both of these airlines are leveraging incentive compensation programs that have a positive impact for everyone involved. Uniting employees against competitors is a great way to encourage all personnel to work together to achieve the same goal. This can create an atmosphere of productive and collaborative behavior, as well as improve communication. Plus, employees feel rewarded for their efforts, and in turn become more loyal to their organization and co-workers.