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Tax Cuts and Jobs Act of 2017 by the U.S. Congress

Review the Background Information:
Following the passage of the Tax Cuts and Jobs Act of 2017 by the U.S. Congress, several large U.S. corporations announced employee bonuses and other incentives as a gesture of goodwill, intending to share the financial benefits from corporate tax cuts with their employees.
In early 2018, United Airlines introduced a lottery system for employee rewards, replacing their traditional annual bonus program. Previously, the average annual bonus was valued at $2,500 per employee. However, this new system quickly backfired, leading to significant backlash and public embarrassment for United’s top executives.
Review the Problem Statement:
If you were to conduct your dissertation on this topic, your problem statement would likely focus on United employees' perceptions of replacing annual bonuses (a guaranteed outcome) with lottery-based bonuses (a risk-based outcome). You would also examine the apparent disconnect between employee perceptions and the expectations of United’s top management.
Review the Purpose Statement:
Now, assume you have developed the following purpose statement for your dissertation:
"This research aims to investigate the reasons behind the failure of United Airlines' employee lottery system as a compensation strategy. By examining the disconnect between the goals of top management and the expectations of employees, this study seeks to contribute to a deeper understanding of the factors that influence employees’ perceptions of risk in lotteries, as well as how these perceptions vary based on socio-economic and demographic factors."
Writing Research Questions and Hypotheses:
• Develop at least two research questions for this study.
• These questions should align with the purpose statement and explore whether the failure of United’s bonus system was due to differences in employee attitudes toward risk.
o For example, you may consider the findings from the article “From Risk-Seeking to Risk-Averse: The Development of Economic Risk Preference from Childhood to Adulthood” by Paulsen et al. (2012), which explores how factors like age influence risk preferences.
• Supporting resource: How to write a research question video?
https://www.youtube.com/watch?v=4-EkPrRxD6k
• After formulating your research questions, create at least three research hypotheses associated with these questions.
• At least one of the hypotheses must be directional.
o Assume that you will use a variable called “risk tolerance” to measure attitudes toward risk, where higher values indicate a greater appetite for risk.
• Supporting Resource: How to write a hypothesis: https://atlasti.com/research-hub/research-hypothesis
• Supporting Resource: A Practical Guide to Writing Quantitative and Qualitative Research Questions: https://pmc.ncbi.nlm.nih.gov/articles/PMC9039193/
In a 600–900 words paper, complete the following:
Introductory Criteria
Provide this study with a title.
Restate the background information (provided above).
Problem and Purpose Summary
Restate the problem statement (provided above).
Restate the purpose statement (provided above).
Formulate at least two research questions for this study (see guidelines above).
Create at least three hypotheses, be sure this is directional (see guidelines above).

Full Answer Section

Problem and Purpose Summary

Problem Statement

If one were to conduct a dissertation on this topic, the problem statement would likely focus on United employees' perceptions of replacing annual bonuses (a guaranteed outcome) with lottery-based bonuses (a risk-based outcome). It would also examine the apparent disconnect between employee perceptions and the expectations of United’s top management. This highlights a critical gap in understanding how organizational decisions, particularly those related to compensation, are received by the workforce, especially when they introduce elements of risk.

Purpose Statement

This research aims to investigate the reasons behind the failure of United Airlines' employee lottery system as a compensation strategy. By examining the disconnect between the goals of top management and the expectations of employees, this study seeks to contribute to a deeper understanding of the factors that influence employees’ perceptions of risk in lotteries, as well as how these perceptions vary based on socio-economic and demographic factors. This purpose statement sets the stage for an in-depth analysis of the psychological and sociological dimensions of compensation, moving beyond mere financial incentives to explore the human element of risk and reward.

Research Questions

To address the problem and purpose statements, this study will be guided by the following research questions:

How do United Airlines employees perceive the shift from a guaranteed annual bonus program to a lottery-based reward system in terms of fairness, motivational impact, and overall job satisfaction? This question seeks to uncover the qualitative and quantitative aspects of employee sentiment regarding the change, moving beyond the simple fact of the system's failure to understand the underlying reasons for dissatisfaction.
To what extent do socio-economic and demographic factors (e.g., age, income level, tenure with the company, and family responsibilities) influence United Airlines employees' risk tolerance, and how does this risk tolerance correlate with their satisfaction or dissatisfaction with the lottery-based bonus system? This question aims to explore the heterogeneity of employee responses, acknowledging that not all employees will react uniformly to risk-based compensation and that individual characteristics may play a significant role. Drawing on insights from research such as Paulsen et al. (2012) on the development of economic risk preference, this question specifically considers how factors like age might shape an individual's willingness to accept financial uncertainty.

Sample Answer

The Unintended Consequences of Compensation Reform: An Examination of Employee Perceptions of Risk in United Airlines' Lottery-Based Bonus System

1. Introductory Criteria

Background Information

Following the passage of the Tax Cuts and Jobs Act of 2017 by the U.S. Congress, several large U.S. corporations announced employee bonuses and other incentives as a gesture of goodwill, intending to share the financial benefits from corporate tax cuts with their employees. In early 2018, United Airlines introduced a lottery system for employee rewards, replacing their traditional annual bonus program. Previously, the average annual bonus was valued at $2,500 per employee. However, this new system quickly backfired, leading to significant backlash and public embarrassment for United’s top executives. This case provides a compelling scenario to explore the complexities of compensation strat