(Reuters) – Boeing is overhauling how it pays employee bonuses to emphasize quality and safety, following production problems found after Alaska Airlines door plug blowout, the Wall Street Journal reported on Thursday.
The plan, one of the many to address the planemaker’s quality issues, will be applicable to Boeing’s nonunion workforce of more than 100,000 employees, managers and executives, according to the report, citing a memo sent to employees.
The biggest shift will be in the company’s commercial unit, its largest, where safety and quality metrics will now account for 60% of annual bonuses, the report said.
Financial incentives at the unit comprised 75% of the annual award, while the remaining 25% was tied to operational objectives including quality and safety previously, the report added.
Metrics that will determine the rewards include employee safety, work done out of sequence on the assembly line and so-called rework required to fix problems, according to the report.
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 newspaper said.
Executives and managers who oversee all units, including CEO Dave Calhoun, will be based on the average of all three, according to the report.
Boeing did not immediately respond to a Reuters’ request for comment.
The company has been in the limelight after a Jan. 5 mid-air emergency involving a new Alaska Airlines 737 MAX 9 that lost a door plug at 16,000 feet (4,877 meters).
The Federal Aviation Administration barred Boeing from expanding 737 production and in January said “the quality assurance issues we have seen are unacceptable.”
(Reporting by Angela Christy in Bengaluru; Editing by Rashmi Aich)
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