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Uber, United and the Importance of the Employee Experience

The term “employee experience” represents comprehensive employee perceptions about their organization from policies and procedures, tools to do the job, to pay and benefits. Addressing the employee experience as part of a broader engagement and talent management strategy is an idea gaining popularity for a myriad of reasons. On one hand, Gallup incentivized senior leaders to focus on engagement when they reported that disengagement is costing U.S. employers between $450 billion and $550 billion per year. On the other, social movements are mobilizing both employees and customers to use their talent and/or buying power to support organizations that have symbiotic relationships with workers.

Let’s take a look at two popular and recent examples as case studies: Uber and United Airlines.

United Airlines and the Pitfalls of Rules-based Culture

Recently, United Airlines forcibly removed passenger David Dao from an overbooked plane. The video of the incident sparked an intensive discussion over customer and employee policies at the airline, which Wall Street Journal reported maintains a “by the book” culture.

In an email to employees, CEO Oscar Munoz defended employee actions, “Our employees followed established procedures for dealing with situations like this.” After hearings in both the court of public opinion and Congress, Munoz stated the incident “was a mistake of epic proportions” and “a turning point for United, and our 87,000 professionals.”

United has since rolled out a list of 10 policy changes, including raising the limit for passengers on overbooked flights to $10,000 as a vow to “empower employees to address customer service issues in the moment.”

At the congressional hearing, Munoz said: “It is my mission to ensure we make the changes needed to provide our customers with the highest level of service and deepest sense of respect.”

It’s not difficult to understand the change of heart. United stock dropped several points resulting in tens of millions of market value lost. In Fortune, Charles Lindsey wrote, “[I]t is crucial for United to reach out to both employees and customers, as they will be the final arbiter regarding the fairness of the airline’s policies and vote with their money and loyalty.”

He also recommended the airline focus on incentivizing employees to follow new policies “by tying customer satisfaction scores to manager bonuses, recognizing employees who consistently provide top-notch customer service, and designing training programs that emphasize the primacy of customer experience.”

Management experts have weighed in that empowering employees to make on-the-spot financial decisions would go a long way, as long as the changes are reflected in the culture and not simply in policy or rhetoric.

Uber and Toxic and Demanding Cultures

After former employee Susan Fowler penned an exposé on Uber’s culture in February, numerous stories from employees emerged about the demanding requirements of working for Uber, both at the corporate HQ and on the road.

New York Times essay declared Uber uses “psychological tricks to push its drivers’ buttons.” Fortune reported eight top executives had left Uber since February. Then came the news that Uber is testing self-driving and flying taxis, signaling to employees the ultimate end-game of their replacement. As automation replaces more jobs with much fanfare, maintaining focus on the value of human touch and the employee experience is critical.

Attorney General Eric Holder’s report of his investigation into Uber’s workplace is expected in May. Board members at Uber issued a statement that they were cooperating with the investigation and are leaving no stone unturned.

One recent report, however, indicates Uber may have lost as much as $10 billion in value because of recent scandals. Earlier this year, during the controversial travel ban, taxi drivers went on strike refusing service to JFK Airport while Uber continued service in a move many deemed as a public statement in support of the ban. More than 200,000 users deleted Uber’s app as result and the company immediately began losing drivers to competitor Lyft.

Uber hasn’t quite made the recovery United Airlines is in the midst of making for their culture or controversial public statements. What observing leaders can learn from Uber’s mistakes is that the value of the employee experience is directly reflected in the customer experience. When employees are unhappy in arguably toxic workplaces, there is a decided drop in the quality of the customer experience — causing satisfaction and loyalty to rapidly fall alongside revenue and market value.

Culture and the Employee Experience

Numerous other organizations have shown both positive and negative examples of how organizations can rebound (or not) from cultures that turn toxic. Consumer campaigns against McDonald’s led to consecutive quarterly losses and Wal-Mart has been the target of countless boycotts partially due to their perceived treatment of employees. Movements like the “Fight for $15” have focused on these two employers with boycotts from nonprofit and citizen organizations and have made a notable dent in their returns.

Meanwhile, organizations that focus on positive employee relations, fair pay and good benefits, and a culture of appreciation — Costco, The Container Store, and Zappos, for example — have been recognized for their draw of top talent and sustainable, rising market value.

The connection between employee engagement and customer satisfaction is clear. Take care of employees and they will take care of customers. Mistreat employees and they will mistreat customers, who will respond by withholding their business and directly impacting revenue.

United Airlines, Uber, Amazon, Wal-Mart, McDonald’s — these organizations have represented case studies on what not to do and while a few of them have addressed negative perception by changing policy and improving the employee experience, many are learning the hard way that the employee experience is highly important to employees and customers alike.

 

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