April 6, 2005

Excerpts: Get What Your Pay For

By: 800-CEO-READ @ 9:33 PM – Filed under: Management & Workplace Culture

Current compensation plans focus on productivity. Maybe the rewards come in the form of lead generation incentives for the marketing department, quotas for the sales force, or production quantity for the operations department. Either way, the focus is on quantity and not quality. This is the current modus operandi, and this is how employees align themselves. You cannot continue to pay people on the basis of productivity alone and expect voluntary focus on quality of serviceit simply will not work.
Any major strategic change does not exist if it does not impact on peoples performance evaluation and compensation package. Changes to compensation plans are usually harder to implement, so companies prefer to disregard them, hoping they will get away with superficial rewards. In reality, by ignoring these critical changes, they signal to their employees that customer strategies are notstrategic. Employees perceive these informal cues and prioritize their work accordingly. When employers choose to bypass customer-related compensation changes, they send a clear message: This is not important to us, but we want you to volunteer to take care of this yourself. A few top-notch employees may spend some time on customers as a way to get ahead, but Ignore this Matter is the conclusion most employees draw when compensation does not encourage customer-focused behavior. After all, if it is not important enough for the paycheck, it must not be very important to the company.