A multi-level incentive model for service organizations

Area of Science:

• Management Science
• Organizational Behavior
• Human Resources Management

Background:

• Traditional incentive programs primarily target production employees.
• Growing interest in applying incentives to service sectors, especially with electronic performance monitoring.
• Need for objective performance metrics in customer service departments lacking established standards.

Purpose of the Study:

• To develop and evaluate a model for calculating incentive bonus payments for customer service employees.
• To assess the impact of an incentive bonus on employee motivation and productivity.
• To create a universally applicable model for service organizations.

Main Methods:

• Developed a model incorporating quality (customer/supervisor evaluations), quantity, sales, and individual goals.
• Utilized customized software for collecting customer feedback and electronic performance monitoring.
• Combined parameters using a linear equation to calculate individual incentive bonuses.

Main Results:

• The incentive bonus program successfully motivated employees, leading to increased productivity.
• Monthly productivity gains for the customer service department exceeded 15%.
• The model was well-accepted by the workgroup and effective in an electronic monitoring environment.

Conclusions:

• The developed incentive model objectively measures employee performance and rewards exceeding standards.
• This approach is effective in enhancing productivity and motivation within service organizations.
• The model provides a viable solution for departments needing to establish performance benchmarks.