Should Business Satisfaction Factor into IT Pay?

by Minda Zetlin, August 2011

If your IT staff is accustomed to measures of success that revolve around operations, getting them to focus on business needs and customer satisfaction can be a challenge. It may require a profound change to their approach to work and their goals. Linking some of your IT employees’ compensation to business-side satisfaction with their work might be a good strategy for creating this change.

That approach makes a lot of sense to Dan Gingras, partner at the professional services firm Tatum who has served as CIO at a number of organizations. “I say the way IT success should be measured is by surveying the end users,” he says. “70 percent of a person’s annual review should depend on the ratings customers give them on the projects they did, and 30 percent should come from conforming to technological standards and getting additional training.”

Obviously this will work better for some functions than for others, but, Gingras says, “every IT role touches business clients in some way.” He continues, “A network engineer may not have much direct contact with business customers, but the network is a core function. You could survey the company and ask if people find the network reliable and if it meets their needs.”

Rob Meilen, CIO at Hunter Douglas North America, agrees that tying compensation to business customers’ satisfaction can make sense. “I’ve seen it done both with postproject surveys and with 360-degree feedback at annual review time,” he says. “When people in information systems understand that sort of feedback is part of the way we evaluate them, they’re more inclined to stay connected with their business contacts.”

At Beaumont Health System, a hospital chain in Michigan, IT has been striving to roll out the service-level agreements (SLAs) it must meet with every department. Every quarter, the IT staff is rated based on quality of support, uptime, ability to meet users’ needs, and time spent on their projects. “Our performance on the SLA is a portion of my review, and [that applies] on down in the organization, depending on people’s roles and how much influence they have had on the performance of the SLA,” says Senior Vice President and CIO Subra Sripada.

“You have to be careful to apply measures like these fairly,” Sripada cautions. “You could be a programmer and have a business analyst give you poor input. If you did a perfectly good job writing code to the specs you were given, I can’t penalize you for what the business analyst did wrong.”

Tying IT staff compensation to customer satisfaction can be a good idea, but it’s not right for every IT department, cautions Gerard Verweij, partner at PwC. “It depends on the culture of your organization,” Verweij says. “Some organizations link any compensation to value creation. But then you have to have some measurable way of tracking that as it relates to IT.” 

For More Information

What Is Success?
Effective Collaboration
The Right Fight


Minda Zetlin is coauthor with Bill Pfleging of The Geek Gap: Why Business and Technology Professionals Don’t Understand Each Other and Why They Need Each Other to Survive (Prometheus Books, 2006).