Making the Case for Pay-for-Performance in Service Organizations, II
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.