Happy Employees Create Profit for Continental Air

Continental Airlines is a company that discovered it could not get out of bankruptcy until it had happy employees who enjoyed coming to work- as well as taking care of customers.

In the 1980’s, after mergers with People Express, NY Air, and others, Continental became a huge airline. Its CEO, Frank Lorenzo, in his zest for cutting cost, had beaten down union morale to such an extent that the airline also became notorious in the industry for lost baggage, late departures, and customer complaints.

After two bankruptcies, Gordon Bethune was hired in 1994. He implemented a team strategy to improve the company’s performance.

Instead of paying out six million dollars to other airlines each month for rebooking passengers that couldn’t make connections due to late arrivals, he would pay half that to his team: $65.00 to each employee for every month Continental placed among the top five in industry on-time performance ratings.

The following month the airline improved from last place to fourth. The next month it was number one. Those with six months perfect attendance had their names entered in drawings for vehicles. In the last two years, profit-sharing checks and parties were given to show appeciation to the team who turned around the failing company.

Today Continental earns record profits and consistently wins top honors for on-time performance and customer satisfaction.

Gordon Bethune’s book is called, From Worst to First: Behind the Scenes of Continental’s Remarkable Comeback