Employee Incentives - How Continental Airlines Took Off

In the 1990s Continental Airlines went through a dramatic transformation from a company whose flight crews ripped company insignia off of their uniforms to one of the best managed airlines and best places to work.  In this case, Continental had to adjust its employee relations; if the employees are happy, they would make the costumers happy as well.  This Continental Airlines case study offers many lessons for companies.  Continental’s success proves that even in situations like bankruptcy recovery or facing a tight labor market companies can attract and retain quality employees while encouraging them to work better. 

In this case study Continental Airlines inspired its employees to improve during a difficult time.  During the 1980s and early 1990s, it had survived two bankruptcies and was now aggressively improving its image and business model.  This forced the company to think creatively about how it could improve productivity while improving employee morale without spending much.

The airline’s management decided to implement an incentive program to encourage the employees to increase their productivity.  To do so the airline bought several top of the line Ford Explorers to give away to its employees.  However, there was a catch.  Only those who did not use any sick days for a certain period of time were eligible for the drawings for the coveted Explorers.  Eager to win a free SUV, many employees aimed to qualify for the contest.  They probably decided to live healthier, stop acting sick occasionally, and work holidays when scheduled to do so.  Ultimately, the money that the airline invested in the vehicles yielded much higher savings in increased productivity.  The plan worked.