Twice blessed: From left, Continental Airlines’ human
resources executives Donna Towle and Melanie Jernigan
present reservations specialist Ermanno Iacopozzi with a new Ford
Explorer his second to reward seven years of perfect
In an era of budget cutbacks
and corporate scrutiny, big companies continue to see
great value in running incentive programs. For employees, the
allure of travel, cash bonuses and expensive premiums remains a
powerful motivator. As an example, a 2004 survey by the Maritz
Travel Co. found that 89 percent of employees competing in an
incentive program kept the travel reward in mind when performing
their jobs. For employers, these programs help boost profitability,
performance and team-building. Incentives, in short, still appeal
to the bottom line.
But such programs must be well run to succeed. M&C talked with
planners at four major U.S. corporations with significant and
distinctive incentive contests. Their stories will prove
Continental Airlines: A rally
Houston-based Continental Airlines’ program makes a great example
of the power of incentives to turn around a company’s corporate
culture, its esprit de corps and even its fortunes.
“Ten years ago, we were the most broke airline in the industry.
We had a product customers did not want to buy and a work force
that did not want to come to work,” says Donna Towle, the carrier’s
senior director of corporate human resources. Add to that a poor
on-time record for arrivals and departures, and a reputation for
inconsistent customer service.
Continental’s two formal incentive programs were launched in
1995 and 1996, soon after current chairman and CEO Gordon Bethune
came aboard. Towle, who helped design the programs with other top
managers, says they specifically targeted two areas found to need
the most improvement: employee dedication and teamwork.
Beyond the generous travel perks employees already received as
part of their benefits, a new incentive initiative gave the
carrier’s 40,000 employees (with the exception of senior managers)
a chance to win a new Ford Explorer, provided they had perfect
attendance for a six-month period. Each period ended with a
drawing, and one winner from each of 10 work groups was
The other program, intended to boost monthly on-time arrivals,
was cash-based. When first launched, employees received $65 each
month the carrier made it to the top five (as determined by the
Department of Transportation) and $100 if it achieved number-one
“The first month it was offered, we made it to the top five,
and we’ve moved up consistently,” says Towle. As economic
turbulence and fierce competition has persisted, the bar has been
raised from top five to top three, and now the airline has to place
first before rewards are handed out. Also, Explorers are now
awarded once a year, instead of semi-annually. The carrier hopes to
bring back the broader rewards in the near future.
To date, Continental has given away some 120 Explorers and paid
$332 million in on-time bonuses; according to Towle, the amount is
far less than costs the airline would have incurred to compensate
customers for delays.
CEO Bethune and Continental’s other top brass consider these
incentive programs so crucial to the airline’s continuing success
that they’ve retained them in the wake of 9/11 and through some
tough fiscal periods, even when hard business decisions such as
employee furloughs have had to be made.
“We said we could save a few a hundred grand, even millions [by
cutting the programs], but we would have inherently changed the
company’s culture,” notes Towle. “We would rather keep them and be
a smaller company.”