The Case for Pay-for-Performance - Rationalizing Service Incentive Pay
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.