Avoid Call Center Schizophrenia from Pay for Performance – Part 1 of a 2-Part Blog Series

/, Call Center Training, FCR, For External Relationships, For Internal Relationships/Avoid Call Center Schizophrenia from Pay for Performance – Part 1 of a 2-Part Blog Series

Avoid Call Center Schizophrenia from Pay for Performance – Part 1 of a 2-Part Blog Series

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A few weeks ago, I was reading an interesting article about schizophrenia.  It talked about the statistics, symptoms and treatment for this terrible disease.  At first I was alarmed by the recent research numbers, an estimated 3.2 million Americans suffer from this mental illness.  Wow.  As I read on, I learned that four types of “delusions” exist in schizophrenics, and from that list of four, “Delusions of Control” is one that really struck a chord with me.  Naturally, I started to draw some parallels between this particular symptom and people I know, myself and those in my line of work.  I do believe it’s fair to say that based on the delusion of control alone, we all have a touch of schizophrenia from time to time.  Perceived control is a way of life in the call center.

When reflecting on the life inside a call center, it’s easy to believe that we are patients that are often not medicated to control our delusions.  The call center as an asylum may not be a stretch!  Not only is it insanely intense, it is also a place of constant contradiction.  We often have expectations of our employees and our call center agents to adhere to a specific model intended to produce a controlled response (a great service experience).  In the same breath, we also expect that model to produce the opposite results (do it fast, right and cheap).  Isn’t this setting your team up to feel schizophrenic?    We allow agents to believe they are in control, but in reality, they are not.

customers-grade-the-callsI was reminded of this parallel when speaking with one of our partners last week.  This particular client had three service centers that were using the “Pay for Performance” model with their agents.  As he elaborated on the damages this was causing, I began to recall the correlation between my recent revelation on call center schizophrenia and the “Pay for Performance” model (particularly in service orientated call centers.)  In this particular model, agents are being paid based on metrics such as number of calls handled and number of minutes spent on those calls.  This is the expectation set forth.  At the end of the month, organizations are left scratching their heads as to why customer satisfaction scores are so low.  Well, the innate service component is being squished out of the agent as they are trying to hurry on to the next caller.  But yet, we are expecting an outstanding customer service experience to come from our service orientated call center, right?  Insanity in its true form and we’ve all had this conversation with ourselves and everyone on the management team.

This will be the first in a two-part series focusing on designing the perfect, or as-perfect-as-you-can-get, model for service call centers.  Part One will discuss the “Pay for Performance” model, how it has been incorporated in the service call centers and how it is affecting your agents and your customer service scores.  Part Two will discuss how to build effective balanced scorecards and, in turn, a more appropriate model to your service call centers.  We need to control the insanity!

What is “Pay for Performance?”

“Pay for performance” also known as incentive pay, rewards workers based on the outcomes they achieve as opposed to the traditional model of paying for time worked.  These models have been wildly popular in outbound telemarketing for many years, advancing the earning potential of skilled salespeople while “weeding out” those who in a conventional pay model would largely rely on their base salary to pay their bills.  More sophisticated (sales) incentive pay models financially penalize agents for “buyer’s remorse,” encouraging quality sales acquisition methods.

Sales vs. Service 

While time and outcome-pressured compensation models may work in a sales environment, they represent the antithesis of what is needed in the service world.  Conventional wisdom states that in a sales environment, there is only one outcome that matters — sales that “Stick”.  Certainly there are complexities in how a call center agent reaches a “Yes,” but that does not negate the fact that there is only one outcome that is guiding the call flow.  A customer service call center is far more complex.  Customer service call center agents are tasked with resolving calls in a manner that is pleasing to customers, builds brand loyalty while remaining sensitive to everyone’s time – the customer on the phone and the one waiting to be helped.  That is quite a tall order especially when a case can be made that the Sales team is often responsible for the call to the Service team.  At the end of the day, incenting agents based on a single outcome may expose your organization to a very high level of business risk.

“Why are my customer service scores so low?”

The correlation between time spent and outcome is much more fluid.  Let’s examine some of the unfortunate outcomes of ill-conceived pay for performance models in customer service centers:

As an assignment, add your metrics to this list and evaluate them against the delusion of control construct.

“If not “Pay for Performance”, then what should we use?”

In a service center, a balanced agent scorecard is a far more effective way to pay and incent agents. Balanced scorecards force agents and their managers to focus their attention on more than a single Key Performance Indicator (KPI).  Some of CRM’s existing customers have access to an important tool which assists them in determining the relative importance of agent skills, from the perspective of the customer – predictive (regression) modeling.  In the figure below, the beta levels on the left indicate the level of impact each agent skill had on the customer’s overall perception of the agent’s performance.  The right side of the figure indicates the current performance level of that skill (on a 1 to 9 scale).

One business partner uses this regression output to not only set priorities within their agent scorecard, but to also set priorities for ongoing / developmental training for the upcoming quarter.  The figure below indicates the degree of improvement in customer satisfaction this business partner has been able to achieve by linking customer, agent and training priorities.

Companies using the “Pay for Performance” model in their service call centers will remain to be at war with themselves.  If you are paying your agents on the number of calls they take, then you will get a high number of repeat callers and lower FCR rates due to customers being rushed off the call.  If you are currently using the “Pay for “Performance” model in your service center, have you experienced similar results?

Now that we identified a much more suitable, more effective model to adopt in your service call centers, it’s time to discuss “how.”  Part two will discuss just how you can build effective balanced scorecards to incentivize your agents.

About Jim Rembach

Jim Rembach is a panel expert with the Customer Experience Professionals Association (CXPA) and an SVP for Customer Relationship Metrics (CRM). Jim spent many years in contact center operations and leverages this to help others. He is a certified Emotional Intelligence (EQ) practitioner and frequently quoted industry expert. Call Jim at 336-288-8226 if you need help with customer-centric enhancements.

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