Incentives and your Customer Experience
By Colin Taylor
“Make your employees happy and they will make your customers happy.”
This simple maxim has been echoed by business leaders from Richard Branson to Herb Kelleher, and it is true. The challenge lies in how you make you employees or in the case of a contact center, your agents happy. It is your agents that interact with your customers, they are the ones who deliver service and have the greatest impact on your Customer Experience. There are a myriad of lenses through which we can examine the impact that your contact center organization can have on the customer experience, product or service knowledge, emotional engagement, ease of interaction, professionalism, etc. Each of these, of course, is at some level a reflection of the culture and practices you have embraced in your operation. In this article we will drill down on an item near and dear to every agents’ heart and that is incentives and compensation.
The job of an agent is often spending long days performing monotonous functions to an unappreciative audience. It is often a thankless job and not very well paid in many cases. Yet it is these folks that we empower to represent the organization to our most valuable asset: our customers.
Incentives and recognition programs go a long way to making agents feel valued with very little investment. It doesn’t take much to create an environment that has fun moments, where an agent can be motivated and feel valued. Feeling motivated helps us all to perform better and feeling valued is a prerequisite for agent engagement. Incentive and recognition programs that engage, and recognize the staff, are often a great investment.
A good comprehensive compensation structure has long-lasting impact on the self-actualization and motivation of staff. If correctly designed, the compensation structure can withstand changes in both market and workforce trends so that only minor, if any, adjustments are needed.
Compensation and rewards must be closely aligned with the results the organization wishes to achieve. Rewarding agents with increases in pay for achieving additional skills or ‘blocks’ of skills, is a best practice. Rewarding agents based on objective performance can be more challenging. Rewarding the top 20% of agents with bonus is nice for that high achieving group and provides incentive/motivation to those directly behind them, but more than half the center is likely to give up on the bonus because they see it (the bonus) as unachievable. As one group of agents told us, “As soon as we figure out how to earn bonus, they change it, so they can take it away.” A bonus or incentive needs to look attainable to most of the center to be effective. Examples of misaligned objectives can include penalizing Team Leaders for high AHT when it is not an Agent goal. A better, more appropriate measurement, (FCR, for example) could be used to be sure incentives are focused on greater customer satisfaction. Some organizations employ re-earnable bonuses based on a balanced scorecard.
Motivation and Incentives
Studies have indicated that in order for an employee to reach optimum performance, three major factors must be considered and addressed:
While having the right skills for the right job should be addressed as part of the hiring process, “motivation” and “opportunity” falls under the control of operations (i.e. contact center management). In this section, we will focus on what motivates agents, not only to perform better but also to continue their employment with the center. The ability to improve one’s own performance is a major factor in retention!
What motivates employees can be grouped into two major categories: Intrinsic and Extrinsic Motivation. It would be unwise to consider each of these categories in a bubble without the impact from the other. Although extrinsic motivations (such as promotion and bonuses) are very important, studies have shown that intrinsic motivations (such as self-mastery and personal enjoyment) have a longer lasting impact on retention.
In other sections, we have discussed the importance of performance improvement and coaching. It is necessary to emphasize that those steps are not just to improve the performance of the center, but also to create a sense of achievement and self-mastery for the agents. An environment and opportunity to continuously improve individual performance will keep the employees engaged and loyal to the organization. Agents, like everyone else, would like to reach higher levels of performance and gain personal satisfaction in doing so.
Another element to be considered is personal growth and development. Best in class contact centers provide succession plans for qualified agents, including a development plan for agents to gain necessary training and experience for more challenging positions. This opportunity for personal growth can be a major factor for increased retention as agents can see a long-term career (and not just a stop-over). Creating a career-development program requires that the center (Management, Team Leads, Coaches) understand agents’ motivations and aspirations, be able to discuss agents’ strengths and weaknesses, assess where they stand in their development, and, finally, have a structured forum to agree on next steps with defined expectations and established check-in points.
It is well established that employees expect to get paid for the work that they perform. When an organization hires high-quality staff, it must be understood that these high-quality staff, expect to see faster moves to more challenging positions and higher salaries. It is imperative that the organization maintain a list of qualified agents, create opportunities for their career growth, and deliver on those promises.
Another well-established fact is that organizations should provide incentives to their employees in order to motivate them to improve individual performance by repeating the desired behavior. It is management’s responsibility to determine and clearly define what is that “desired behavior.”
Elements of Effective Incentive Programs
Performance that is rewarded is likely to be repeated. However, it takes time (and necessary coaching) for agents to achieve that optimal performance. Keeping in mind that agents will naturally focus on factors that get them the most bonus, it is imperative that the incentive program is well-thought out and carefully designed, regularly monitored and that it remains in place over time. Failure to do so, not only does not deliver the expected and desired results but also could have negative impacts on employee morale and motivation. That isn’t to say you can’t change your inventive program, but if you introduce the plan for the coming calendar year, you will likely get push back if you try and rescind it in April.
When establishing an incentive program, organizations must find a balance between quality and productivity as well as a balance between individual versus team incentives. Too much focus on any of these elements will erode the necessary and desired focus on the other elements. Such balance also represents the desired culture of the organization (what are the organizational values?).
Although most employees find the concept of higher pay for better results to be appealing, it is also important to include non-monetary reward and recognition to the incentive program (for example thanking an agent with a handwritten note for a difficult job well done).
Lastly, it should be noted that although an incentive program with a substantial payout could be effective in a short term, it would be also very difficult to change or eliminate in the future as agents will become dependent on it.
Tips for Creating an Incentive Program
- Introduce the program properly! – Take time to develop the program, consider different scenarios and, when ready, introduce the program with a wide range of communication. Highlight the key points, and why those points are important. Clearly define the metrics and provide proper (continuous) reporting.
- Which agents can benefit? – It is imperative that all agents have an opportunity to benefit from the program. This does not mean that 100% of agents would receive incentives, but rather 100% have the opportunity. Targeting top 10 or 20 percent high performers for bonuses could easily discourage the others from actively participating. Similarly targeting the bottom 10 or 20 percent performers for coaching could have a negative impact on how coaching is perceived (punishment rather than assistance to improve). This is not well aligned with long-term retention and engaging all the staff.
- Gap analysis for each individual – The best in class contact centers compare each individual performance, not against the others, but rather against their own performance. In an environment of continuous improvement, it is important to measure, monitor and assist in achieving individual improvement. After all, team improvement is the sum of all individual improvements.
- Time to adjust – Achieving desired behavior does take time. A proper incentive program is based on continuous improvement and provides ample time for agents (and the management) to learn and adjust to the program requirements. Changing the program too often and too fast causes confusion among agents and contributes to low morale.
- Keep measurements simple! – Individuals (Agents, Team Leads, and Management) need to understand and recognize their performance. Simple and clear measurement removes ambiguity from results and eliminates the perception of bias.
- Maintain accurate performance data – Well designed performance reporting (Balanced Scorecard) depends on timely and accurate data. There may be different sources for such data and it is imperative that a proper reporting system is put in place to store, analyze and provide actionable reports.
- Keep the program flexible – From time to time, there is a need to focus on different aspects of the operation. This change should not cause a complete overhaul of the program but rather a small tweaking of the program. For example, a change in desired member experience should easily be covered under quality score without changing the overall scoring and payments
- Support company goals – What is the vision and overall goal of the organization? Many incentive programs fail because they do not support company goals. Agents can easily see any disconnect and then have to decide to follow the incentive program (to get paid) or company goals and values (even if it makes them look under-performing).
- Seek input from agents – Incentive programs are for agents! Best in class contact centers set the overall requirement for the program (what we need to achieve) and use the agents’ input in shaping and designing the program.
- Add a benefit for everyone – An effective incentive program must be inclusive. Design a program that provides small benefits for small achievements and larger benefits for larger or repeated achievements.
To find out more about how Taylor Reach can help your company with incentive programs and the customer experience, CLICK HERE to schedule a free consultation.