© Reuters. FILE PHOTO: FILE PHOTO: The Boeing logo is displayed on a screen, at the New York Stock Exchange (NYSE) in New York, U.S., August 7, 2019. REUTERS/Brendan McDermid/File Photo/File Photo
(Reuters) – Boeing (NYSE:) said on Thursday it is overhauling how it pays employee bonuses to emphasize quality and safety, with this year’s operational goals exclusively focused on these two components.
This announcement comes as the planemaker has scrambled to explain and strengthen safety procedures after a door panel detached during a Jan. 5 flight on a brand new Alaska Airlines 737 MAX 9.
Under the new annual incentive plans, which will cover executives, managers and employees, safety and quality metrics will now account for 60% of the payout at Boeing’s commercial unit, the company said in an email to Reuters.
The Boeing Commercial Airplanes (BCA) unit manufactures commercial aircraft, including the 737, 767, 777 and 787.
“It’s very, very important to drive the outcomes that we’re all committed to, and that’s to deliver a safe and quality product to our customer,” Boeing COO Stephanie Pope told employees in a webcast.
These operational safety and quality metrics will include employee safety, traveled work, rework and completing work needed to deliver airplanes in inventory, Boeing said.
Earlier at the BCA, financial incentives comprised 75% of the annual award, while the remaining 25% was tied to operational objectives including quality and safety.
Boeing said all employees will be required to complete training courses on product safety and quality management as a pre-condition to receiving any annual incentives.
In Boeing’s other two units, defense and services, financial metrics will still determine 75% of bonuses. But quality and safety will be the only factors to determine the operational scores, the company said.
The Federal Aviation Administration, or FAA, had barred Boeing from expanding 737 production in January, saying “the quality assurance issues we have seen are unacceptable.”
WSJ first reported on the annual bonuses earlier on Thursday, saying the move applies to Boeing’s nonunion workforce of more than 100,000 employees.
(This story has been corrected to remove the reference to ‘747’ since the plane model has been discontinued, in paragraph 4)
