[ad_1]
WHAT A STUDY OF A FIRM’S CUSTOMER-SUPPORT EMPLOYEES REVEALED
We put our prediction to the test by analysing the performance of customer-service employees at an online firm in Greece that offered web-hosting services to more than 60,000 customers worldwide.
The data spanned more than three years (from 2011 to 2014) and covered both quantitative (e.g., number of phone calls attended, sales revenues) and qualitative (e.g., feedback from customers) measures of performance.
During this time, an incentive plan was in place for the firm’s customer-service employees. They were periodically rewarded for their performance across a range of tasks.
We found no evidence that employees refocused on the rewarded tasks following the incentive payment. At first blush, this might suggest that the effects of the incentive plan do not derive from reactive responses to received rewards. They might simply derive from employees’ anticipation of future rewards.
However, we did find a temporary and positive effect of incentive payment on sales performance, an outcome not linked to incentives. And the effects were economically meaningful: Our back-of-the-envelope calculation suggested that sales rose by 1.8 per cent as a result of the ripple effects from incentive payments.
Other unincentivised measures also temporarily improved in the period immediately following incentive payment. For example, improved revenues resulted not only from greater sales quantities but also from the sale of more expensive products.
Next, phone calls between customer-support employees and customers temporarily increased in duration following incentive payment. And customer-support employees were temporarily more likely to involve back-office technology experts to help improve customer solutions.
Why would unincentivised measures show such patterns following incentive payment? According to our interviews, employees knew that service quality was critical, even though it was hard to measure. The employees also cared about their employer’s esteem. The receipt of the incentive payment periodically reminded them just how lucky they were to be working at a firm offering performance incentives.
These findings have direct practical applications. First, they help managers improve the timing of other HR interventions, such as commitment-building activities or informal feedback. Employers might choose to administer such motivators during the trough of the employee response to a periodic incentive payment.
Second, they suggest that firms should cultivate the social dimension of the employment relationship. This way, employees are more likely to respond to periodic incentive payments with enhanced effort on unincentivised yet consequential aspects of their work.
Argyro Avgoustaki is Professor of Management, ESCP Business School. Hans TW Frankort is Professor of Strategy, City, University of London. This commentary first appeared in The Conversation.
[ad_2]
