Reward the right results: Worthy partners deserve worthy goals

Most of today’s corporate rewards systems are designed to be reasonable and, therefore, easy to justify to the board of directors or to an outside auditor. But the problem is that loyalty is not generated by reasonable performance; it is generated by over-achievement – and this level of performance requires outstanding teamwork by partners who trust one another’s commitment to win/win results. Today’s compensation schemes don’t align partner interests; they create zero-sum games in which one player can win only at another’s expense.

Track what’s important
Your partners are smart enough to know that anything you truly care about, you measure. To show them that loyalty is at the top of your leadership agenda, measure the health of key relationships and the level of loyalty you are earning.

Many loyalty leaders have developed a clear metric for customer value. The trick is to home in on the relatively few dimensions of performance that really matter to your target customers, and then to track performance with the same rigor that most companies apply to their profit statements.

Reward the right results
Most executives want to be considered responsible and cost-conscious managers, so they feel obliged to keep a lid on compensation. Many loyalty-based firms show enormous cost advantages even while they compensate their people well in excess of market rates. Both productivity and loyalty grow whenever there is opportunity for greater rewards. And whenever your employees create exceptional value for your customers and for your other partners, they deserve exceptional rewards.

Align incentives
Retaining and motivating your stars means offering them the opportunity to earn outstanding compensation. But in the long run, it is not the money alone that keeps most of them motivated. The real incentive is the gratification that comes from using their gifts to their fullest potential and from creating truly extraordinary value for their customers and partners.

Reward the right results to retain the right people – long-term employees create value.

Want to find out more about how leading companies thrive in a customer-driven world? And how you can implement the fundamentals that drive sustainable growth?

Fred Reichheld is a Bain Fellow and founder of Bain & Company’s Loyalty Practice, which helps companies achieve results through customer and employee loyalty. He is the creator of the Net Promoter system of management.

Consulting Magazine chose Fred as one of the “25 Most Influential Consultants” in its 2003 annual survey. According to The New York Times,” [He] put loyalty economics on the map.” The Economist refers to him as the “High Priest” of loyalty.

Fred is a frequent speaker at major business forums and his work on loyalty has been widely covered in the Wall Street Journal, New York Times, Financial Times, Fortune, Business Week and The Economist. In 2012, Fred Reichheld will be visiting Sydney for the first time and will be speaking at Australia’s leading two-day executive event for entrepreneurs and
business leaders of growing companies.

EWhether you’re starting a business or perating in a large organization, Fred Reichheld workshop will provide a blueprint for long-term growth and success. (Find out more )

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