The Unintended Side-Effects of HR Programs
Last week, I wrote about a car dealership that really gets HR. The dealership puts a tremendous focus on aligning their HR programs and practices with their service-oriented business strategy. I ended up buying my car from them, but over the last week or so, I also got to witness some of the unintended side-effects of their service-focused HR strategy.
Motivating Employee Behavior
The car dealership ties their employee bonus program to customer satisfaction. Regardless of how many cars they sell, employees who receive a satisfaction rating below 93-percent receive no bonus.
It’s an incredibly effective motivation tool. My car dealer practically scaled mountains to find the car I wanted at the price I wanted, and even threw in a few extras, free of charge. I couldn’t be happier.
Managing Culture
I’ve written before that HR professionals are in many ways anthropologists for the business world. When launching a program, it’s really important that you evaluate the subtle ways that it will impact the organizational culture.
The bonus program at the car dealership clearly got employees to exhibit the behaviors that HR felt aligned with their business strategy. However, the employees also did some things that HR probably didn’t intend them to.
A Bit Pushy (But Not About the Car)
During the whole shopping-around experience, the salesman was very laid back. I never felt pressured to buy a car or go with a particular model, brand or set of pricey features. All in all, it was a very pleasant experience. Even signing the papers and doing all the administrative stuff wasn’t that bad.
As we got close to when I was actually going to take the car home, though, things changed a little. During the sales process, the dealer had casually alluded to the satisfaction survey, and after I picked his brain some more (curious HR guy that I am), I fully understood the implications of a bad rating.
Despite that, he mentioned on several occassions, in rather blunt terms, that it was “really important to him” that he receive an “excellent” rating. A “very good” was actually below the standard for the dealer, and too many of those would mean he wouldn’t get his bonus.
Not only did he mention several times that if I could, I should give him an “excellent” rating, but one of his colleagues who helped me sign some documents told me that it would “help my salesman out a lot” if I could give him an “excellent” rating (if I felt he deserved it, of course). He mentioned it at least two or three times.
Reassessing Your HR Programs
If I were asked to analyze their bonus program, there’s a few changes I think they need to make.
Change the Rating Scale
Their goal is to have very high customer satisfaction. To me, if a customer found the service “very good,” that means they’re highly satisfied. Many people are very stingy with giving an “excellent” rating, or think “very good” is exactly what it means - very good.
Perhaps a rating of “very good” means you get your bonus, while an “excellent” means that you exceed your bonus. Incentivizing out of fear that you won’t get your bonus probably drives negative side-effect behaviors more than providing that extra carrot for an above-and-beyond bonus would.
Change the Messenger
I imagine that salesmen are probably telling customers about the survey just to cover themselves, and I can’t blame them. But management should assure them that whomever delivers the survey to the customer is going to thoroughly explain the rating options and the implications of each.
Overall Experience
Overall, I had a great experience. The service was excellent, and I would recommend the dealer to my friends and family in a heartbeat. The pushy stuff at the end, though, left me with a bit of an awkward taste in my mouth, and slightly eroded the “excellent customer service” atmostphere that they were going for. I think with a few minor changes to their bonus program, they’d have the perfect formula.
What are your thoughts? Have you ever observed a program that had unintended consequences, for better or worse? Share them below!
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