Why CX Leaders Need to Rethink Using Incentives for Employees

From meeting sales quotas to achieving high levels of customer satisfaction, incentivizing employees is commonplace for organizations aiming to increase performance within their workforce.

Customer experience leaders are no different. According to Forrester, 85% of companies tie CX to compensation. But the same report also details why linking customer experience performance to financial rewards (and other incentives) actually results in less-than-favorable employee behaviors that can negatively impact employers.  

The Downside of Tying CX to Incentives for Employees

Tying compensation and incentives to customer experience might provide a short-term bump in employee performance, but it may do more harm than good in the long run. Pearl-Plaza’s “Considering Employee Incentives for CX Success? Five Ideas for Better Engagement That Won’t Backfire” resource highlights the pitfalls associated with CX incentives for employees, including:

• Bad Employee Behaviors – Most companies that offer incentives use a pay-for-performance or “variable” pay structure, directly tying incentives to individual employee performance. But according to Forrester, this model encourages more troublesome employee behavior, like submitting fraudulent customer reviews and questioning the authenticity of CX data.
• Bad Customer Experiences – When employees feel the weight of incentives – especially relating to their pay – you run the risk of shifting their focus from top-quality customer service to worrying only about achieving rewards. As a result, employees might start pestering customers to submit positive reviews or high survey scores, leaving customers feeling under pressure and uncomfortable.

3 Things Brands Can Do Instead of Offering Incentives

Delivering exceptional customer experiences shouldn’t be contingent on whether there are incentives on the table. And CX leaders should regularly encourage employees to deliver their best work, without solely offering rewards.

Here’s how you can support employees while enabling them to provide memorable experiences that keep customers coming back for more:

• Share Positive Customer Feedback with Employees. Customer feedback typically circulates at a high level, with most employees completely unaware of how customers rate their experiences. When your company receives positive customer comments, share it across the organization. Highlighting great feedback helps to keep employees motivated and excited about their work.
• Identify More Opportunities to Coach Employees. Customer feedback presents an excellent opportunity to improve employee performance. Instead of reprimanding employees if they receive less-than-favorable feedback, use the comments as an opportunity to coach future performance. This turns an initially negative scenario into a positive career-growth moment.
• Focus on Impactful Metrics Employees Understand. Tracking metrics is the cornerstone of successful customer experience programs. Use data and information that’s meaningful to employees, and that they have a chance at impacting. It’s beneficial for your organization as a whole if employees have a better grasp on how their performance attributes to overall company success.

Bottom line: Incentives for CX don’t work. They can encourage bad behaviors and competitiveness in organizations, which may negatively impact your business. Instead of using monetary rewards, CX leaders should focus on supporting employees through coaching, metric sharing and more so they can continue to provide top-tier customer experiences.

To learn more about incentives and CX, check out “Considering Employee Incentives for CX Success? Five Ideas for Better Engagement That Won’t Backfire” today!