Q & A: William B. Albernathy (Marketing News).

• Position: Of consulting firm Abernathy and Associates - Interview

Incentive Pay Systems and Customer Service

WILLIAM B. ABERNATHY, Ph.D., is founder of Abernathy & Associates, a consulting company that designs and manages performance measurement and incentive pay systems for firms in a variety of manufacturing and service industries. The company is located in Memphis, Tenn.

Q. You've said that conventional wage and salary systems actually discourage high-quality customer service. How does that come about?

A: Salaries motivate employees through negative reinforcement. The relationship is that an employee avoids negative consequences by avoiding the practices that are discouraged. It's sometimes colled management by exception, or intimidation.

Q. Can you elaborate on the consequences of this system?

A: Consider the position of teller, a key position in banking. Most banks only measure how well a teller balances his cash drawer-not the number of customers he serves or the quality of his service. If his withdrawals and deposits are out of balance at the end of the day, he's given a warning.

Given this system, will tellers see customers as assets or liabilities? There are no positive consequences for serving the customer; he really represents only an opportunity to make a balancing error. And since the only issue is avoiding mistakes, the quality of service declines.

Transactions become meticulous and slow, and your employees ore unwilling to help a customer in any way except "by the book."

Q. How would positive reinforcement work in this environment?

A: If we paid tellers directly for each customer served, customer wait time would be instantly reduced, and tellers would be more eager to serve them. Further, the tendency of employees to take vocation or personal days on...