United Airlines brings in ‘customer satisfaction-based pay scheme’ as CEO is denied chairman role
United Airlines is making steps to recover from the brand damage caused when it violently removed a passenger from a flight, bringing in a new pay-scheme based on customer satisfaction.
United Airlines overhauls pay scheme to ease brand damage
The plans for a “targeted compensation plan” tied directly to customer satisfaction scores are aimed at executives of the airline, according to a recent filing.
"United's management and the Board take recent events extremely seriously, and are in the process of developing targeted compensation program design adjustments to ensure that employees' incentive opportunities for 2017 are directly and meaningfully tied to progress in improving the customer experience," it said.
The move comes after a damning video which showed a blood-spattered passenger being dragged from a flight which United had overbooked. The airline wanted volunteers to give up their seats for some of its own employees.
When no one came forward, passengers were randomly selected by a computer algorithm to leave the flight. When one passenger, Dr David Dao, refused, Chicago Aviation security officials boarded the flight and pulled him from his seat before dragging him off the plane to the horror of fellow passengers.
In wake of the incident, United’s share price plummeted as calls for a boycott against the carrier mounted.
The US Senate Commerce Committee has since asked for information on its overbooking policies and specifically about the incident involving Dr Dao.
Chief executive Oscar Munoz asked yesterday (Friday 22) for an extension to reply.
“We are in the process of gathering the full set of facts about this incident and finalising a thorough review of our policy,” he wrote.
“We look forward to sharing the full results of this ongoing review and the immediate, concrete actions we will take to better serve our customers with the committee.”
Munoz has come under fire for how he handled the incident.
In an official apology, he described the incident as “upsetting” for United employees and for having to “re-accommodate these customers”.
In a separate letter to staff, he said: “Our employees followed established procedures for dealing with situations like this.
“While I deeply regret this situation arose, I also emphatically stand behind all of you, and I want to commend you for continuing to go above and beyond to ensure we fly right.”
The company has since reversed plans to name Munoz as chairman.
A recent filing officially removed provisions in Munoz's contract related to his future appointment as chairman of the board. Instead, future decisions about the chairman position will be made by board members.