Can you explain your incentive pay to your staff?

Our most successful clients include a customer satisfaction or loyalty metric as part of their front-line employees’ incentive calculation.  In some cases, customer feedback comprises up to 50% of the employee’s potential bonus.

Over the years, we’ve learned that developing an effective incentive program for front-line employees can be a pretty tough balancing act.  If thresholds are too high, the incentives don’t motivate, and if they are too low, employees begin to expect a bonus just for showing up.

As Dave Martin and NCBS points out in this American Banker Article, some banks do find the right balance but the calculation is so complicated that employees never know what their bonus check is going to look like.  The result is that bonus day is often a frustrating experience and not a positive one, as it should be.  Not only does an incentive plan need to be relatively straight-forward, but it also needs to be clearly and frequently explained, in order for employees to feel comfortable with it.  When employees understand the plan, how it aligns with the bank’s overall strategy, and feel it is fair to them and others in the organization, incentive plans usually are effective tools for growth.

Click here to read the full American Banker Article.