Too often, in the everyday throng of the corporate world, Management tends to lose sight of many of their star players. The race to better the bottom-line translates into a disproportionate recognition of the sales staff, who are bringing in the business. This imbalance is further exacerbated by the notorious bell curve that shapes most corporate performance appraisals: there are a limited number of distinctions that can be allotted and these are summarily assigned to the usual suspects.
While this system is great in the short term, it is unsustainable and damaging in the longer term. In the relentless competition for limited business, where the pie doesn’t grow as proportionately as the hands digging into it, it becomes a self-defeating endevour. That is because the robustness of the new business is not supported by a congruously adequate operational and service structure/ platform. This disparity translates into dissatisfaction, both internal and external, culminating finally into good staff and customers abandoning their loyalty to the organisation and the brand.
What, then, is a workable panacea to this conundrum?
Where the company is in an early growth phase, skewing your rewards structure towards the left to make it more sales driven, is in fact, a good approach. Based on the presumption that the basic operational and service infrastructure is already in place and functionaing, the objective then can predominantly be to mobilize new business.
Up to what point, then, can this skewed rewards structure be gainfully applied?
That strategic pivot needs to be meticulously defined as the acceptable number of complaints per 1000 customers or the Complaints Ratio. This will also define how the company aims to position itself in terms of a niche or mass market service provider or both. If you’re the former, then a complaints ratio between 5% and 7% will work; if you are catering to a more specific, smaller/ discerning subset of customers, then a complaints ratio of less than or equal to 1% should be the standard.
Right from the start, have a robust feedback system in place to not only capture customer driven complaints but also bank initiated VoC* streams. (I will go into more detail on Customer Experience systems in another blog post). To ensure that the business that your sales teams have so laboriously extracted from the market, remains within the realms of your brand, it is essential to define and keep in perspective the goalpost at which to recentre the rewards program of the company towards a more balanced sharing out of bonuses and compensations. This then, will be defined as the Tipping Point at which the company should regroup and review their performance enhancement techniques and payouts.
Talent Management: While the compensation and rewards system may be frontline-skewed depending on which part of its life cycle the organisation is at, there are other steps that can be taken to ensure internal organisational robustness. A key element here is talent management. This is a hybrid financial and non-financial/ psychological reward system that ensures the company retains its best and brightest even while it is predominantly focusing on business acquisition and growth. Enter the HR department and the Management Committee. These 2 entities will need to work in focused tandem to ensure the success of any talent management initiative. The modus operandi is simple:
–The top performers in every unit across the organisation need to be identified. This is your talent pool.
–An HRRM* needs to be designated to each of these individuals. These RMs will regularly (every quarter at least) engage with their professional wards to find out how they’re doing/ discuss skill set development opportunities/ identify possible new positions/ optimally manage expectations – basically a VoE* and staff development session.
–Each one from the talent pool is also assigned a Mentor who is a member of the Management Committee. They also meet regularly where the conversation is about aspirations/ life goals/ sharing of experiences – basically a Character and Ethics building session.
It is incredible how effective and motivating non-financial reward and recognition programs are. Human beings at their core, are an amalgamation of emotion and feeling. These psychological gestures of appreciation are sometimes more effective than even financial rewards and result in a thriving, loyal, market leading work force. Having said that, both financial and non-financial acknowledgment structures that are highly skewed towards just a few functions/ units, lose their temerity and effectiveness with time. ManCom* wisdom plays a big role in finding that right balance, at a given inflection/ change point in the life of the organization of keeping all their people feel appreciated and happy to be a part of the brand.
Succession Planning: This element of the corporate rule book is not given half as much importance as it should be. I have seen a number of fabulously managed units/ companies fall to the wayside when the manager leaves. The culprit: poor to non existent succession planning and training. There are a couple of reasons for this inadvertent oversight: the first, mostly because it just is not on the company radar, which means there is no trickle down incumbency of this factor into performance appraisals. This also means that it usually doesn’t tend to happen and even if it does happen, it is haphazard and personality driven rather than systematic, continuous and goal oriented. The other reason has to do with our human emotions again – an insecurity about being challenged or even being outshone by the Second-in-command. This i have also witnessed and have seen the natural/ most probable successors to a job role, leave the organisation as they are sidelined and trivialised.
Again, a robust succession planning system needs to be in place to ensure the organisation does not fall into the rut of outsourcing most key positions or losing its essential human capital of promising/ talented one-downs.
- *VoC: The Voice of Customer feedback platform consists of a number of feedback streams to allow customer concerns and suggestions to be effectively channeled.
- *HRRM: Human Resources Relationship Manager
- *VoE: The Voice of Employee feedback platforms are formal avenues to facilitate constructive staff critique and suggestions.
- *ManCom: corporate-speak for the Management Committee.