Monday, April 03, 2006

The Marketing Of Pay For Performance

Pay for performance is a good thing. It's self explanatory. Just saying it conveys the meaning. Or does it?

I've noticed that many pay for performance programs aren't really paying for performance. Here's a great example.

I think what I'm seeing is that marketers have sensed that consumers like the pay for performance plan. However, employees aren't always as receptive to the idea. So, employers are attempting to make both sides happy. Offer guaranteed money with a fraction of your salary determined by your performance. This strategy allows the employer the opportunity to market its "pay for performance" program.

Investors usually applaud when the press release announces its new pay for performance program. New customers line up; eager to see a difference from their current provider. Meanwhile, nothing changes. Nothing changes because nothing changed.

Pay for performance works. It works when it is implemented properly. Our employees are paid based on one factor. Customer satisfaction. We're not the ideal job for everyone. We demand a lot from our employees. Our employees know that their paycheck is determined by our customers. They know that their pay can be terrible if they simply "go through the motions". And they know that their pay can be well above the industry average if they satisfy every customer.

Our pay for performance program is integrated into our marketing program. We use it to our advantage. But, our pay for performance program is different than most pay for performance programs. The difference.

We don't just say it. We do it.

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