Integrating customer orientation, employee compensation and performance management: A conceptual framework

Tuzovic, Sven & Bruhn, Manfred (2005) Integrating customer orientation, employee compensation and performance management: A conceptual framework. International Journal of Business Performance Management, 7(3), pp. 255-274.

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Compensation systems are an essential tool to link corporate goals such as customer orientation with individual and organisational performance. While some authors demonstrate the positive effects of incorporating nonfinancial measures into the compensation system empirically, companies have encountered problems after linking pay to customer satisfaction. We argue that reasons for this can be attributed to the measurement of customer satisfaction as well as to the missing link between customer satisfaction and customer retention and profitability in theses cases. Hence, there is a strong need for the development of an holistic reward and performance measurement model enabling an organisation to identify cause-and-effect relationships when linking rewards to nonfinancial performance measures. We present a conceptual framework of a success chain driven reward system that enables organisations to systematically derive a customer-oriented reward strategy. In the context of performance evaluation, we propose to rely on integrated and multidimensional measurement methods.

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ID Code: 86441
Item Type: Journal Article
Refereed: Yes
Keywords: customer orientation; rewards; success chain; performance measurement; employee compensation; employee pay; performance management; compensation systems; customer satisfaction; customer retention; reward model; reward systems; performance evaluation
DOI: 10.1504/IJBPM.2005.006719
ISSN: 1368-4892
Subjects: Australian and New Zealand Standard Research Classification > COMMERCE MANAGEMENT TOURISM AND SERVICES (150000) > MARKETING (150500) > Marketing Management (incl. Strategy and Customer Relations) (150503)
Divisions: Current > QUT Faculties and Divisions > QUT Business School
Current > Schools > School of Advertising, Marketing & Public Relations
Deposited On: 06 Aug 2015 00:17
Last Modified: 18 Aug 2015 00:49

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