Customer Satisfaction Bonuses

A company's long-term financial performance hinges on customer satisfaction. Awarding employee bonuses solely on short-term profits is likely to have exactly the opposite effect on future profits. Instead, award part of the bonus for achieving customer satisfaction goals.

Suddenly the importance of customer satisfaction takes on new meaning for everyone in the company. More than written declarations and mission statements, employees look at what affects their pay to understand what the management feels is important.

NHQ-winning builders use a variety of methods to integrate customer satisfaction into their bonus systems for field and office employees.

Neumann Homes has a profit sharing plan that offers up to 20 percent of an employee's income as a bonus when net profit is in the range of 6 to 15 percent. The bonus is adjusted by a factor from 0 to 1.4 when customer satisfaction ratings range from 80 to 98 percent. Each associate's bonus is then adjusted by 0 to 120 percent based on achievement of personal goals.

At Shea Homes, field personnel receive bonuses for each home based upon on-time completion and defect-free quality. Everyone else shares a single bonus pool based on the company's performance as measured by key business drivers such as home buyer satisfaction, trade partner satisfaction, home quality and operating profit. Employees are eligible for a bonus of 10 to 16 percent of their salary, depending on their job grade.

Use your bonus program to reinforce a clear and consistent message that aligns everyone in the organization toward customer satisfaction. You will be rewarded with a nice bonus -- long term profits.

For builder best practice details, request the free "Customer Satisfaction Bonuses" fax by calling the NAHB Research Center's ToolBase Hotline at 800/898-2842 or e-mail toolbase@nahbrc.org