by Mark Leonard
Managing Conflict – The End of Contract Bonus Fiasco (Part 1 of 2)
At the start of the final drawdown of troops in Iraq in January 2011, KBR had about 12,000 direct hire employees and 40,000 subcontract employees in country. Over the next 11 months, as bases closed across the country, there would be a gradual drawdown of employees, and by December 31, 2011, these 52,000 individuals had to be out of Iraq.
This was a period of uncertainty for employees, who had no idea when their time would come and they would be sent home. When bases closed, they were either relocated to another base with a vacancy for their position or sent home based on an employee rating system that looked at time on project, performance, and attitude. As the year progressed and the number of active bases in Iraq decreased, fewer employees were relocated and more employees were sent home. It was in the best interest of employees to start applying for other jobs and leave on their own terms, before KBR could send them home.
From an HQ perspective, we needed the employees to stay in Iraq until the very end because we had a contractual requirement to complete the mission. HQ emails encouraged employees to update their resumes and apply for jobs but stay on until the end and finish the mission. These emails also highlighted KBR’s projects worldwide, implying that there would be more jobs available for employees who stayed on until the end after the contracts in Iraq expired. One of the most controversial strategies employed by HQ to convince employees to remain in Iraq was the submittal of a proposal to the Department of Defense for additional funding to pay an ‘end of contract bonus’ to the employees who remained in Iraq until the end of the contract. Part 2 will delve deeper into the end of contract bonus proposal, looking at its consequences and effectiveness in managing employee uncertainty during the drawdown.