Recognising Performance

 When you decide on salaries you have to pay the market rate determined by the economic situation, and the availability of labour.  In tough times companies adjust the wages, paying below  inflation. They can also reduce staff by choosing to invest in more machinery to automate the work process. The opposite applies when the economy is growing.

Service employs administrative, support and field staff. While the administrative staff are easier to find, field staff  are part of a small number of people usually employed by competitors and therefore more costly to recruit. The alternative of training your own can be time consumming and extensive training is expensive. In determining the salary of the various groups, company HR may use general criteria such as qualifications  and years of service. A wage  budget  across the company can be settled for  various categories.

Where a large number are employed it is not easy to differentiate without upsetting the entire work force. The better worker may not be satisfied with a general negotiated salary and may look to go elsewhere for more. Working on customer sites where competitors may also have equipment makes comparisons easy and your engineers may be poached by the competition. If corporate HR provide a total sum as part of the company wide budget you will be forced to "rob Peter to pay Paul,"where Peter is at the bottom end. Service, needs some flexibility in the remuneration of its field people bearing in mind the conditions of work and the skills required. What do you do if you have a large number of high performers with no possibility for extra reward? Without monetary flexibility you end up demotivating and losing the best performers.

Bonus payments for productivity can overcome such problems. If performance exceeds real quantitative objectives then extra payment is justified in the form of bonus. "Standard hours" can be used to define every acivity so that from the database you can calculate the average number of annual visits per system, and the standard of hours and spares used  on each visit to diagnose and repair. Added to this,  you can add subjective items such as customer satisfaction ratings, and you have a set of measurable criteria. Performance over  the standard averages will lead to bonus  payments that do not infringe corporate  policy.

 Support staff can also be eligible for a bonus based on total service performance,  or on field performance of a group that they support. By linking everyone's performance and bonus to the work done for customers,  the end result is higher profitability and customer satisfaction which are the two main objectives of a service manager.