Mike Finney, General Manager of Halifax Electric Membership Corporation, explained how his organization's customer satisfaction ratings have reached levels unheard of before. "When we first introduced incentive plan 5 years ago, there was skepticism and some resistance by employees, but I believe today everyone is happy we made change," he said. "We had several features that were paramount in plan design, including: making sure there was a return for both employee and organization; improving customer awareness and satisfaction; and, ensuring all employees had a certain amount of compensation at risk."

The final plan design is set so there is roughly a $2 to $3 return to organization for every $1 included in incentive pool. Halifax has an independent survey company perform a Satisfaction Survey every quarter and uses annual average to measure success.

That survey company recently reported that Halifax has reached top 10% in customer satisfaction. Every quarter, incentive plan targets and progress toward goals are openly discussed in a meeting with all employees.

Mr. Finney described one of most vivid

changes in culture, "Once employees realized they were only going to earn a significant payout in plan if they worked together, they started working together, and results really improved."

SUMMARY

All three firms have had periods where they did not reach goals in incentive plan, and there was no payout. One company lost a key customer and had a bad year, but plan helped everyone understand impact and assisted them in recovering quickly. Halifax faced a challenge when they missed a goal by a very narrow margin. The decision reached was to honor goal and not waffle. The result was stronger support by Board.

These three cases indicate how valuable incentive plans can be and reflect results similar to those found in Incentive Compensation Survey we recently completed. Comments by employers contacted in our survey clearly indicate successful results in 93% of cases. Organizations from all industries reported their incentive plans have had a positive impact on organizational results.

If you would like a copy of Incentive Compensation Survey, please contact us at dweide@hureco.com.

By: Al Weide, HURECO, INC., P.O. Box 2457, Vienna, VA 22183, Phone: 703-242-6344 Fax: 703-242-2897 www.performanceresult.com

We don’t know how high member satisfaction number will go. Of course a rating of 10 is highest, but every notch up is increasingly more difficult because there is less room to go to top. Is Halifax at highest level it can reach? Whatever future, Halifax has already experienced a triumph in customer satisfaction improvement that is seen as a model for other employers.

Customer satisfaction is only one part of incentive plan designed for Halifax by HURECO, INC. The plan also targeted revenue growth, efficiency, and product sales. The overall return for Halifax for last 4 years has been an average of 344% per year. For every dollar organization spent on plan- including design, operation and employee pay-outs – it received $ 3.44 in additional revenue and cost savings. You can review full article and gain more information on designing incentive compensation plans at www.performanceresult.com.

Article by Al Weide of HURECO, INC. Helping You Select, Develop and Reward Talent. aweide@hureco.com