Employee Compensation Plan Incorporating Survey Results
Posted by Jeffrey Henning on Wed, Feb 18, 2009
Last week at the drugstore, the cashier asked the woman in front of me if she would mind completing a survey postcard and dropping it in the mail. When the customer said she wouldn't mind, the cashier said, "Please make sure to rate us a 5! It will keep the boss away, and that's a good thing, right?" The cashier laughed nervously as she made the suggestion.
My displeasure at this must have been clear, because the cashier didn't offer me a survey. As a survey professional, it was like watching a young, innocent questionnaire taken out behind an alley and mugged.
I'd like to say it was the first time I'd seen an innocent survey victimized in this way, but each of the last three car dealers I went to (each a different brand; I'm a "mercenary" in the automotive Apostle Model) had sales people who made similar pitches to me about giving them a high rating on the questionnaires that I would be sent.
But nothing ever matched what I routinely heard when conducting major-account satisfaction studies for an independent telephone company. I would have interviews go like this...
Me: Please rate the company for each attribute on a scale of 1 to 10, where 1 is poor and 10 is excellent. Overall value?
Respondent: 1
Me: Reliability?
Respondent: 1
Me: Voice quality?
Respondent: 5
Me: Data quality?
Respondent: 1
Me: Account Management?
Respondent: 10
Me: Billing?
Respondent: 1
Me: Customer service?
Respondent: 1
It turned out that the telephone company's account managers were compensated in part based on the ratings they received.
I completely understand the natural desire of executives to want to tie employee compensation to client satisfaction. They want to make it clear to employees how important customer satisfaction is and incentivize them to improve that satisfaction. But all too often all this leads to is individuals gaming the system.
For the independent telephone company, we saw a wide range of behavior:
- Some account managers simply explained the situation to the respondents and asked them to rate them a 10. In the example above, the respondent added parenthetically that he did not blame the account manager for the problems that he had, that the account manager was a valued partner in trying to work around the problems he experienced, and he wanted to make sure the account manager was rewarded.
- Some account managers submitted contact details for unhappy clients late in the process, making it more likely that they would not be included in the rounds of face-to-face interviews that we were conducting.
- And some account managers made sure that unhappy clients were not even on the list to be surveyed.
- Other account managers made sure that while unhappy clients were listed by name, all the contact information was wrong.
Behold in all its glory the corrupting power of tying employee compensation to survey results!
Accurate survey results are an important source of feedback for your organization. Please don't endanger the quality of that information by tying it directly into bonuses for employees. Instead, compensate employees on customer actions that reflect their loyalty: renewals, repeat purchases and sales of accessories and upgrades.
As for the drugstore, I ended up going to its web site and letting them know about the situation. I'm sure the survey author would want to know that wires were getting crossed in this way.