Not Another Follow-Up!

Last week I brought you the story about the Comcast retention specialist, and the disastrous audio recording of him fighting like a man possessed to keep a disgruntled customer from disconnecting that has been going around the Internet. At the time I speculated that the company might have a policy about not letting people leave, or quotas of people that each retention specialist has to talk out of it, or even that such measures might be part of the compensation package offered to these personnel. As the follow-up story on the Slate site makes clear, it’s actually much worse than that…

According to the informant cited in the article, who claims to be a former Comcast employee and appears to have the documentation to support his or her claims, the company pays its retention personnel on a salary plus commission scheme similar to those used by many sales organizations. The salary offered is very low, often just a few dollars over minimum wage, and the majority of the compensation is based on preventing a specific percentage of your calls from resulting in an actual disconnect. This would be difficult enough, but the story also claims that the company uses target thresholds, or “gates,” to drive their people harder and avoid paying as much in “bonus” money…

On such a system, instead of collecting the percentage of your incentive money that corresponds to your performance (e.g. you have a 70% retention rate, so you get 70% of the money) you must be over a certain target to get anything above your insultingly tiny salary. If the threshold levels are half of your bonus at 75% and full bonus at 85%, and your retention rate is 74%, you get nothing. And while it is possible to survive on 16,000 to $20,000 per year in certain parts of the US, I’m not currently aware of any place in this country where you could live well on that salary level – especially if you have a family to support…

Now, I suppose one could argue that nothing is keeping these Comcast reps from finding better jobs; one could also argue that if there is a surplus of people willing to do these jobs at this price level then the company would be mad to offer more. The job market is controlled by the law of supply and demand, just like any other free market, and recent experience in the United States has demonstrated that there are people who will work for rates even lower than the minimum wage if you ask them. However, none of this has anything to do with my original contention, which was that using such methods will motivate people into the wrong behaviors…

If the company’s incentive program rewards people for retaining customers, but does not reward them for providing helpful and courteous service, then people will try anything they can think of to retain customers and pay no attention to courtesy – or even common politeness. This is the same problem that causes salespeople to be impatient and rude to someone who isn’t making a large purchase, waiters to ignore patrons who aren’t ordering anything expensive, and many categories of personnel to try to sell people expensive goods and services that the customer does not want or need. All of these behaviors lead to lower standards of customer service, inferior public image, deterioration of the company’s brand, and ultimately to destruction of the company’s bottom-line value…

As tempting as it might be to blame the Comcast fiasco on one bad employee, or even on one bad policy, what this actual represents is the single most common logical fallacy in any service economy – and one of the most common misapprehensions in all of management theory: the belief that our employees are nothing more than machines, and all we need to do in order to increase their output (work) is to increase their intake (pay). I’d be a little more charitable about the whole thing if we didn’t have over five decades of research that prove this is garbage…