Everybody – employees and bosses – gets the most out of clear, measurable performance goals. In the contact center, that means setting KPIs like total interactions, average handle time, CSAT, Net Promotor Score, transfer percentage, and other metrics.
In many companies, contact center agents are also responsible for some sales-oriented interactions, such as customer retention, loyalty programs, cross- and up-selling, and even direct sales. This is especially true in the telecommunications, cable, travel, subscription services, and banking sectors.
More and more often, agent performance in those specific areas is tightly linked to a monetary incentive, also called variable pay, which has proven to be highly engaging for both front office agents and their supervisors. But if you’re currently implementing this pay-for-performance model, then you know it has complex challenges of timeliness, accuracy, and efficiency.
To make pay-for-performance more effective, there are three primary goals: driving agent behavior, streamlining compensation, and building trust. They are obviously highly interrelated, but we can disentangle them enough to identify what you can do to better accomplish your business objectives.
Drive agent behavior
- Incorporate multiple KPIs and agent roles in compensation plans.
- Design compensation to align behavior with larger organizational goals.
- Keep your finger on the pulse of the contact center.
Variable compensation should be based on multiple performance metrics specific to each organization’s business goals. Flexibility is key, in order to combine and weight KPIs in various ways in accordance with each employee’s role, function and team participation, as well as to easily adjust the compensation mix to reflect market changes, new products or changing objectives.
Team managers should regularly review both the performance metrics and the breakdown of incentive payments, preferably with a deep dive that highlights patterns and their drivers. Keeping your finger on the pulse of the contact center in this way gives you the insight to adjust variable compensation in order to shape agent behavior, increase revenue, and improve customer retention.
Streamline compensation
- Automate routine compensation processes.
- Reduce administrative tasks wherever possible.
- Always be ready for rapid change.
Modern compensation plans need to take into account multiple, dynamic factors. Clearly, standard spreadsheets, manual processes, and homegrown workarounds are no longer sufficient for the task. The solution is incorporating more process automation, specifically for time-consuming, error-prone manual routine processes such as verification of data input, payment validation, inquiries and dispute resolution. Furthermore, automation can be applied to rapidly process transactional data from multiple systems, based on defined rules and dependencies, much faster than alternative manual solutions. With automation integral to calculating compensation at volume, you can implement complex, highly accurate incentive plans.
In order to ensure maximum success with your variable compensation plans, the best approach is to model, simulate and compare multiple options or scenarios, incorporating the latest information available. Any effective monetary incentive strategy must also include scalability, with the ability to adjust to sudden changes in demand or shifting business goals. To this end, a process (workflow) should be in place for rapid approval and launch of compensation plans, SPIFFs, and accelerators.
Build trust
- Pay correctly
- Pay on time
- Ensure compensation transparency
Adopting the foregoing measures will certainly save you time, money and resources, while increasing accuracy and efficiency. But they will also be vital to employee satisfaction and retention, thanks to payments made frequently, quickly and accurately.
You can build trust among your contact center agents even further with an incentive system that provides them transparency regarding their variable compensation. Ideally, they would have instant access to their most current statements, a clear understanding of how payments incentives were calculated, and visibility into relevant performance metrics. Agents should also be able to calculate potential compensation at any time and to see the direct impact of their performance on their pay. The result is greater agent engagement and motivation, as well as the mitigation of payment disputes.
A real-world case study
A global healthcare services management company recently undertook an internal initiative to reach the goals we laid out above.
The company’s variable compensation is metrics-based and complex, with payment linked to service-based goal attainment or number of goals reached. In addition, the company is implementing 50 distinct compensation plans for various payee groups.
Initially, all the variable compensation calculations and payments were handled manually, using spreadsheets and consuming managers’ attention. Payments took a long time to be processed, accuracy was subject to human error, and implementing changes was cumbersome. The process had clearly reached its limit.
The decision to incorporate automation in the company’s pay-for-performance compensation model brought virtually immediate results in terms of speed and accuracy. At least one month of lag time was eliminated from agent payment schedules, thanks to faster transaction processing with automated calculation and payment workflows. In addition, the system is inherently flexible and new payee groups can be easily and seamlessly incorporated.
The company has also increased transparency. Previously, only managers received compensation reports, which meant they had to explain payment statements to agents in their teams. Now, detailed compensation statements are automatically issued to each payee, including an option to directly submit queries through the system.
Lessons learned
Pay-for-performance was quickly made more effective for the healthcare services management company. How? With automation and related measures that drive agent behavior, streamline compensation, and build trust. Variable compensation calculations and payments are faster and more accurate, while compensation statements are comprehensive and visible to payees. As a result, managers save time, employees are more engaged, and the company can cost-efficiently implement a wide range of dynamic incentive compensation programs.
Learn more about our Pay for Performance solution