Making Across-the-Board Incentives Work Harvard Business Review February 2002 Presented By: Jessica Cornwell

Continental Airlines * Until 1995, one of the worst-performing airlines in the industry. * Ranked last among the ten major domestic airlines in on-time arrivals and baggage handling, and first in customer complaints. * By 1994, the company's net losses had reached $613 million, and was on the brink of bankruptcy.

Across-the-Board Incentives * Mutual Monitoring * Visible Rewards companywide incentives often produce disappointing results in big companies, because of the "free rider" problem Mutual monitoring is when ees check up on each other. Visible rewards used in this case was a $65 check. Taxes where taken out of the regular pay check so ees saw the full promised reward.

In a Nutshell… Across-the-board incentives can work if the employees are motivated to work together and can perceive how their personal performance will effect their reward. Company was so successful that they had to make a stricter system for the following years.