Align Employee Rewards And Incentives With Customer Outcomes

The idea of customer-focused rewards and incentives for employees isn’t new. But lack of widespread adoption points to missed opportunities for many companies. Forrester asked customer experience (CX) executives whether or not their firms link employee recognition to customer experience metrics, and the vast majority of informal and formal reward programs are not tied to customer experience outcomes.

 

My recent interview with Blair Skramstad from John Deere Financial reinforced why connecting employee and customer goals is so important. Blair told me that they recently rolled out a customer experience storytelling competition to collect great CX stories and shift their culture to be more customer-centric. One of their customer experience champions expressed frustration that so many of the story submissions she received were anonymous. She discovered that employees were afraid that their managers would be upset that they were spending time with customers as opposed to their primary responsibilities. This is a perfect example of where well-crafted customer-centric goals would have made a difference. 
 
And with that in mind, Simon Yates and I are collaborating on research to examine how companies can better align employee rewards and incentives with desired customer experience outcomes. Simon and his colleagues are writing a whole playbook for CIOs on workforce experience, and his earlier blog post highlights the interdependence between creating better employee experiences and delivering better customer experiences. 
 
My research will build on Paul Hagen’s previous work on building a customer-centric culture and reinforcing customer-centric employee behaviors. I will focus on the types of rewards and recognition that fundamentally shift corporate culture toward customer centricity, how companies can implement the right ones for their organizations, and what technology solutions help ensure long-term success. And I’m not just talking about compensation — especially in early stages of customer experience maturity, non-monetary incentives like competitions, awards, preferred paths to promotion, and other perks play an important role in behavior change.
 
Simon and I are also interested in finding out about the roadblocks in the way of aligning employee incentives with customer metrics. Some of our hypotheses so far:
  • It’s too hard to collect data with a level of detail meaningful for individuals or small teams.
  • Companies haven’t yet integrated or correlated customer and employee data.
  • CX pros or CIOs don’t have enough authority over employee incentives to make desired changes.
Let us know your thoughts in the comments — what incentives, formal or informal, is your company using to promote customer-centric behavior? Why do you think more companies aren't tying these together? I'll also be speaking about engaging employees for customer experience transformation at Forrester's Forum For Customer Experience Professionals West, October 9th to 10th in Los Angeles. Hope to see you there.

Comments

One organization I worked for

One organization I worked for in the past requires the Project Manager to submit a Customer Satisfaction Survey to the client's manager at the conclusion of each project. The survey has about 4-5 categories/criteria which the client is to comment and rate on Meeting Expectations (ie Did not Meet / Meet / Exceeded). The criteria are established between the PM and client at the beginning of the project.
I think, if all project team members were included in the creation of the criteria and a review of client's feedback, it would fair to have this incorporated in the employee performance evaluations.

Great Example

Hi Iain,

That's a great example, thanks for sharing it. I like your point that involving the project team members in the creation of the criteria and the review of the client's feedback makes it fairer to incorporate into the employee performance evaluations.

Alignment to customer outcomes

I think the reason that organisations aren't focussing on the customer outcomes is because they are measuring the wrong things.

It is important for organisations to include qualitative measures around the customer experience, not just quantitative measures ie; achieving sales of $x per month/quarter etc.

I have seen the negative impact of when the focus is only on the sales as it drives certain behavious that don't align with good customer outcomes, especially when the sales person/BDM isn't committed to the organisation.

To have the corporate paradigm shift, it takes vision from the CEO and commitment from the leadership team to put a program in place. It would also require relevant KPIs at this level to increase customer outcomes so it isn't a one off project. It needs to become part of the organisations DNA.

It is easier and cheaper to sell more to our existing customers so it is also about ensuring we continually meet the customers requirements and be agile. Without the customer, the organisation is not viable so it needs to have the focus and attention it deserves.

Incentive Programs for Employees

Hi Sam Stern

Employees are getting idea of customer rewards of incentives, and looking of getting full opportunities of rewards incentive programs for Employees from the company.