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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