Rewarding employees based on performance not only helps achieve organizational goals, but also motivates workers to increase productivity. According to Lawler (2010), providing incentives to employees’ ranks among ways through which company owners and managers employ to keep employees focused on an institution’s main business. The study uses Equatorial bank (my organization) to analyze incentives to employees based on customer satisfaction.
The bank rewards its employees based on reported customer experience and satisfaction. The company has set reward programs that motivate employees at group and individual levels. The rewards are different from salary but have a monetary value. Examples of such incentives given to employees for attaining excellent customer satisfaction include; bonuses, profit sharing, commissions and stock options. When an employee achieves targets set by management regarding customer satisfaction, he or she is given a stock option program to purchase company shares at cheap prices for a specified period. Bonuses are awarded to recognize personal performance and are paid on annual basis (Schuler & Jackson, 2011) . The board allocates some funds aside from profits earned and grants a certain percentage to employees who lead in customer retention and satisfaction. Through awarding incentives, the company achieves market growth due to increased customer base and retention.
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The company considers customer feedback in implementing performance metrics. Such feedback is key in helping predict future profits. Bartol and Srivastava (2009) noted that when customers are satisfied and happy, such clients are likely to refer others to the company as well as make repeat purchases. Through implementing performance metrics based on provided feedback, the company retains customers, outpaces competitors and improves existing products. However, implementing some performance metrics based on customer feedback is difficult to the company due to limited resources (Zenger, 2013) . Setting performance metrics based on responses can also be a disadvantage in cases where such feedback has not been thoroughly researched, thus costing the company in the long run.
References
Bartol, K. M., & Srivastava, A. (2009). Encouraging knowledge sharing: The role of organizational reward systems. Journal of Leadership & Organizational Studies , 9 (1), 64-76.
Lawler III, E. E. (2010). Rewarding excellence: Pay strategies for the new economy . Jossey-Bass.
Schuler, R. S., & Jackson, S. E. (2011). Linking competitive strategies with human resource management practices. Academy of Management Perspectives , 1 (3), 207-219.
Zenger, T. R. (2013). Why do employers only reward extreme performance? Examining the relationships among performance, pay, and turnover. Administrative Science Quarterly , 198-219.
