There were four major factors with Continental’s incentives program that led the company to the success they had set out for.
- 1. Planning The Right Incentives Programs
The biggest thing that Continental got right was tying the employees’ incentive reward directly to their on-time departures. This was smart for three reasons:
- On-time departures are a performance metric that can be measured accurately and it’s easy to compare them to the departure times of other airlines. The U.S. Department of Transportation auto-records of when planes enter or leave the gates, so the numbers are always available and are completely accurate.
- Departure times are a measure that is affected directly by the actions of crewmembers and airline staff.
- Delayed departure times are critical to an airline’s competitiveness because they lead to other problems such as late baggage and unhappy flyers.
- 2. Employee Monitored
A common deterrent to the “free riding” issue is the ability of employees to self monitor each other. Some call this “mutual monitoring.” This is a process where employees check up on and motivate each other. Normally this process won’t take place at a large company because employees fear being ostracized by other employees when they enforce rules and sanctions on their coworkers. Continental avoided this by recognizing that groups working at an individual airport are relatively small and are more motivated to keep each other in check. A small localized team means you’ll probably get the wrong kind of recognition if things don’t go right, and it’s a lot easier for others to know where to point fingers when the small business incentives rewards aren’t realized.
- 3. Real Reward
The easy way for Continental to administer the promised rewards would have been to simply input it into each employee’s next paycheck. Brenneman and Berthune recognized that the reward would have more impact if the employee received an actual bonus check instead of a line item on their regular check. They also made sure the check was a full $65 by incorporating any taxes into the employees’ regular paychecks. This was meant to give workers the full satisfaction of their reward.
- 4. The Right Foot Forward
Continental could have easily placed the burden of meeting these goals solely on the backs of their employees, but chose not to. They knew that for their workforce to realize success with the rewards program and their goals, they needed to put some changes in place from the top as well. They rearranged the way their flight schedules worked so that on-time performances were easier to achieve. This led to the program being kick started by the workers when they saw near-immediate results, which in turn led them to have confidence in the program’s effectiveness. And when “free riders” saw their coworkers exerting extra effort, they got on board and worked harder, too.
This incentive reward program was obviously a success. It became so popular and successful that the company was forced to change the reward to $65 for any month that the airline ranked in the top three airlines for on-time departure. They did raise the stakes with an added incentive of $100 if the company was number one. This rewards program engaged the employees effectively on other fronts, too. With the employees being on board with the rewards, they were also more motivated and happier in their jobs and the airline saw reductions in employee turnover, on-the-job injuries, and sick days as a result of it.
In just two short years Continental had utilized an incentive program that was so successful, they saw their threat of bankruptcy evaporate, and their profits climb all the way to $385 million. Starting an incentive rewards program like the ones we offer here at Incentive Solutions will help motivate your employees’ performance and strengthen their attitude; this will certainly help anyone’s business. And anyone considering designing and implementing one of these incentives programs could certainly learn a thing or two from the success of Continental.