Why sit and answer the phone all day? - call-center employees

'Just a paycheck' may not be enough for call-center employees, but incentive plans can help boost morale and lower turnover.

Few employees get as little respect from the public as call-center employees, especially those making outbound calls - those dreaded telemarketing efforts that tend to interrupt the family dinner hour. Even workers handling inbound calls can be subjected to negativity, which creates high turnover and related concerns for their employers.

Tracking and assessing call-center performance may be crucial to efficiency, but they also can contribute to problems of employee morale and productivity. Environments in which every call is monitored and timed can drain even the most enthusiastic employee, as can the public's tendency to resent telemarketing calls.

For these reasons, many companies recognize that call-center employees need more than just an hourly wage to be productive. To help keep them motivated, employers are using varied types of incentive compensation, such as bonuses and commissions. Effective incentive compensation plans are essential for the centers because satisfied, motivated employees will provide better-quality customer service. Such incentive plans are key to building and maintaining morale and to achieving a company's efficiency and productivity goals.

Variable Pay Measures

More than half (56 percent) of the participating organizations use
formal variable pay plans to compensate call-center employees. Of
those, 65 percent use more than one measure as a basis for bonuses
or other incentives.

Measure                               Percentage of Companies

Individual objectives                            50%

Department objectives                            36%

Team objectives                                  29%

Revenue generated                                24%

Number of calls made or
completed                                        19%

Level of service                                 18%

Type of sale transacted                          17%

Source: 1998 Call Center Compensation Survey, William M. Mercer Inc.

"Variable pay arrangements that aim at helping companies retain call-center employees, while encouraging them to be efficient and motivated, are in widespread use," says Kimberly Witt, who oversaw the 1998 Call Center Compensation Survey by William M. Mercer Inc. "Almost all organizations - 76 percent of our respondents - have recognition plans or programs. These may be nothing more than a certificate of achievement or designation as employee of the month or their names in the company newsletter, but such public disclosure of having done good work is very important."

Call centers are key to business operations in many industries, Mercer has found. The 252 organizations participating in the 1998 Mercer survey had 875 call centers - many companies operate more than one center. Survey respondents have both full-time and part-time employees and represent a broad range of industry groups and U.S. geographic regions; their customers are other businesses, consumers or both.

Members of the survey's steering committee included Holiday Inn Worldwide, Promus Hotel Corp., Ruppman Marketing Technologies (now called Athena), United Health Care Corp., America Online, American Century Investments, DHL Airways, Duke Energy and Hibernia National Bank.

Of those organizations surveyed, 56 percent use formal variable pay programs - defined as hourly wage plus commission, bonus or other incentives. The chart on page xx shows percentages of participants using various measures as a basis for incentive pay.

Mercer found that call centers generate a volume of 2.2 million calls a year, with each call costing an average of $3.21, including labor.

The Pay Mix

The average call-center employee is paid hourly and annually. "About 90 percent of the income is the base pay, with incentives, bonuses and rewards making up the other 10 percent of their annual income," says Witt. The three jobs with the highest percentage of eligibility for "variable pay" are inbound order taker/data entry, outbound with some selling (the classic direct-marketing caller) and outbound lead generators, who receive the largest incentives.

Witt found that "the median total cash compensation of call-center jobs covered in the survey ranges from $160,400 in salary plus bonus for a corporate call-center operations executive to less than $10 an hour for entry- and intermediate-level phone-based representatives."

Those in the field agree that people who earn $10 an hour or less are most in need of incentives to keep them motivated and productive, as well as actually on the job. "That's only a couple of dollars an hour more than minimum wage or [what someone could make] working for a fast-food restaurant," says William G. Bliss, president of Bliss & Associates Inc. in Brewster, N.J. The firm designs and implements call-center programs for banks, utilities and financial service firms.

The typical call center employee falls into one of two types. There are those who primarily take inbound calls, such as those from potential customers responding to ads or marketing campaigns or from current customers needing information, confirmation or reassurance. Telemarketers make outbound calls and actively try to convince someone to buy or consider buying something.

"Incentives typically are more for outbound employees than inbound because employees taking inbound calls have little control over who calls them and why," Bliss explains. The employee handling inbound calls directs them into a certain pattern and may get a flat fee or bonus for transferring a caller to someone handling a more profitable product or service, he says.

The Advantages of Incentives

Not surprisingly, Bliss and his colleagues have found that providing bonuses and other incentives to call-center employees has a positive effect on the workplace. Incentives that were part of a recruitment and staffing plan he designed and implemented for a transportation company's call center helped result in "retention after nine months exceeding expectations," he says. Similar programs, including one that established "key dependencies and milestones critical to the success of a call-center consolidation project," were successful for companies in financial services, banking and other businesses.

"We have standards for overall performance and business incentives that we build into our goals and criteria," says Janine Brenn, HR director for United Health Care Corp., based in Minnetonka, Minn. "The criteria are part and parcel of our efforts."

One key to her company's success with incentives, says Brenn, is making recognition part of the culture. "It isn't just an occasional program but a constant process, and we want competition without taking away from our team spirit because ours is very much a team culture."

To ensure a culture of recognition, efforts are different at each of the company's 51 sites, and the HR team is "accountable for disseminating a manual of good recognition ideas and getting input from managers for the manual," Brenn notes.

How to Measure Success

A successful bonus/incentive program is based on logic, according to Witt. "The real bottom line is to understand the objective of the call-center employee's job, then determine the things the employee needs to do and weight them accordingly," she says. "Your incentive or bonus program is determined by the market you serve. An international hotel system or a company such as America Online has to be open 24 hours a day and seven days a week, while a retail operation may need to have its call center open only during store hours, plus the hour before and after."

Establishing measuring mechanisms that make sense to call-center employees is important, as is clarifying what constitutes success deserving of a bonus. "Objectives vary by industry, so compensation varies accordingly," says Witt. "Measures can include team objectives if your company's call center is organized in teams, department objectives, individual goals such as a certain number of calls or sales per person or corporate goals established at a high level."

Almost half the survey respondents also use shift differentials, paying more for less-desirable shifts. Fluency in more than one language can be a bonus point as well; pay premiums for multilingual employees average 7.4 percent of base pay rate for such workers.

Call-center employees tend to be measured by the number of calls made, amount of revenue generated, number of calls resolved, amount of time callers have to wait for service and service quality during monitored calls.

Technology can be used in tracking and measuring results to establish rewards. An automatic call distributor/director, for example, allows the hundreds of calls coming in to a call center to be distributed evenly among employees, then tracks the amount of time spent on each call, the availability of each agent and the length of each call, says Bliss. Similar equipment and software are available for monitoring outbound calls.

Whether technological or traditional, measuring systems are vital, says Bliss. "If you can't measure it, you can't manage it or reward the right things."

Establishing Appropriate Reward Systems

Inbound-call agents can be rewarded for attendance and for meeting quality standards, based on call monitoring, says Bliss. "Their reward usually is not a lot. It's not a commission, but it could be a small percentage of their salary every quarter, for instance," he says.

Outbound agents are paid for sales or for taking customers through various stages while getting to the sale, Bliss notes. They usually are part-time employees who are paid a flat hourly rate to make as many calls as possible; then, they get something extra, such as a bonus, for getting the customer to accept information by mail, submit an application or buy something.

Rewards, incentives and bonuses vary widely. "You also have to look at who you're trying to recognize and what is most important to them," says Witt. While cash bonuses are always welcome, many companies also have found success with noncash incentives. "You can have contests, give time off, provide gifts and gift certificates, have employee recognition items and give memberships in local health clubs," says Bliss. "You do have to match the culture of the company, though." That means awarding team-oriented incentives if the call center uses a team-driven culture, rather than individual rewards that would erode team spirit.

Incentives need not be costly, according to Brenn. "We tend to focus on low-cost or no-cost incentives, such as anniversaries and birthdays off and fun gifts or prizes," she says. "These encourage productivity and create energy." Clever ideas have included plastic "eggs" in Easter baskets, with a little prize or toy in each egg; time off or early departures on Fridays; coupons; and a "company car" - matchbox size.

Witt agrees that incentives should be appropriate and need not be expensive. "Some companies have more than one way of recognizing employees," she says. "For instance, every quarter, high-achieving call-center employees may get company merchandise, such as coffee cups or T-shirts. Gift certificates for the theater, restaurant meals and movies also are popular rewards; 59 percent of the Mercer survey respondents use those." Some companies also use things like grocery coupons as rewards for meeting goals.

Bliss suggests moving outbound callers to other assignments on occasion, which could be seen as a bonus or reward, to relieve the stress of the active marketing effort. Coaching and mentoring also can enhance performance while building employee morale, Bliss notes.

The Bottom Line

Clearly, motivating and rewarding call-center employees is essential to center productivity, but such rewards need not cost the HR department a fortune. The key, HR and call-center managers agree, is to develop appropriate incentives for the company culture and type of employee. By making recognition ongoing, any call center can improve both its results and its employee morale.

For more information. The 1998 Call Center Compensation Survey is available for $1,200 ($600 for participating companies) from William M. Mercer Inc. Call (800) 3333070.

International Quality & Productivity Center seminars for call-center managers are held year-round in various locations in the United States. For focus, date and location of upcoming programs, call (800) 882-8684.

Ruth E. Thaler-Carter is a freelance writer/editor based in Baltimore. She has edited two newsletters for the Society for Human Resource Management on international HR and on diversity issues. Her mail address is [email protected].

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