Posted by: Matt Katz
on Dec 15, 2009
A few weeks ago I posted the first of a III part blog entry titled "The Case for Pay-for-Performance- Rationalizing Service Incentive Pay" click here to view. In my previous post I talked about the untapped value of pay-for-performance in service organization for attracting and retaining top talent. In this post, I want to address another concern I often hear from my clients: how do you manage an effective pay-for-performance system without getting lost in the proverbial forest.
Many service managers worry that it will become too costly to maintain, track, control and continuously redesign an incentive system for the right balance of metrics, frequency and incentives. So how do you execute on a pay-for-performance initiative? This is largely a question of technology - great incentive compensation management systems do not only allow organizations to monitor, analyze & manage pay-for-performance initiatives effectively, but do so quickly and easily. Service managers need to make sure that the system is:
- robust enough to manage a complex set of variable incentive plans;
- simple enough to be managed by a business user;
- agile enough to change with the organization and keep up with emerging industry trends.
Once the right technology is in place, managers can begin to address the remaining key success factors: people & processes. Implementing an incentive compensation management system often requires identifying new support roles early and staffing appropriately. At this stage, training and communication are key, keeping in mind that processes can and should be kept as simple as possible.
So make sure your service organization has the right technology and buy-in, and your pay-for-performance initiative will be not only manageable, but a key driver of performance and business results.
Posted by: Matt Katz
on Oct 27, 2009
Recently, clients have been asking me about Pay-for-Performance practices in service organizations. It seems companies are used to applying Pay-for-Performance in their sales forces but the use of Pay-for-Performance in service environments is still a relative novelty. So what is stopping service operations from using incentive pay with their service agents?
The most common fear among service managers is that employees will end up spending all of their time on incentivized activities, e.g. average handle time, at the cost of other activities useful to the service process, e.g. customer experience or brand reinforcement. But in my work consulting for call center clients, it is clear that agents are already evaluated on a clearly defined set of measurable expectations. Some common elements in an agent's performance evaluation include customer service skills, telephone etiquette, knowledge, team development, productivity and attendance. All of these are not only measurable, but are crucial in guiding agents on how to perform well in their service role. So the key to introducing Pay-for-Performance is to find the right balance for these measures, which should be guided by the organization's strategic goals. The right incentive strategy will reflect this balance so that desired behaviors are reinforced and rewarded.
Next time you're thinking about how to motivate and retain your most valuable agents, consider how pay-for-performance can be applied to the key metrics in your service organizations and what the right incentive balance is. In my next blog post I will examine how to manage an effective Pay-for-Performance system.
Posted by: Matt Katz
on Jun 18, 2009
As the initial shock over the receding economy has started to fade, smart companies are starting to think more strategically for the long-term - not just what the end of the quarter will bring. With long-term business plans in mind, what are some of the guiding principles companies should follow?
1. Alignment - What really matters to your business - to your customers, employees, and shareholders? What are the measures and metrics that align with those stakeholders' values? And most importantly, what actions must be taken to make progress against these measures? Doesyour operation have the integrated coaching and workflow to close the performance gap? Are there effective public recognition or incentive programs to reward both performance and progress toward goal? Can your organization focus and align your employees' activities on the 3-5 critical measures they can impact, empowering them to act appropriately to attain both personal and company goals? Giving front-line employees and managers the power to track their KPI's daily and their rank among peers helps bolster self-correction. Giving supervisors the information and tools they need to improve their coaching drives accountability for the alignment of staff with results.
2. Reducing Variability - Variability limits an organizations' ability to improve performance and attain business goals. By identifying sources of both rep performance and business process variation, and then defining initiatives to reduce the occurrence of variability, operations can significantly improve customer experience while reducing operational expense. Where does your organization see variation in performance? What approaches have you taken to reduce this variation? Most organizations focus on the "outliers," or invest too much time singling out bottom performers. Instead, try to identify the employee segments where improvement can have the biggest impact (often mid-performers), and develop the necessary coaching and employee development processes around the needs of this group.
3. Accountability - Accountability within an organization is what makes a strategic plan stick. But where does accountability come from? When front-line employees have visibility into their current and past performance, and can see the business impact they and their team are having on the organization, strategic initiatives can mature from a "flavor of the month" program to an embedded or ritualized aspect of the business. Engagement and accountability at the executive level is critical to developing the organizational infrastructure needed to succeed. And without buy-in and program commitment at the top, any strategic initiative can prove to be a dead end.
Taking action on all of these principles simultaneously may appear daunting, but attempting to answer any of these questions will yield progress. What would it take to answer only 1-2 of these questions in your organization this week?
