When talking with business owners and managers, the topic of cash incentives arises every now and then.  Some managers feel they’re the best way to get employees to deliver better customer service. Others disagree. But the question remains.

A recent article in Entrepreneur.com suggests money is not always the best way to motivate employees to better performance.

“…research shows it only works in the short term and other things keep employees happy and productive over the long run.”

Dear Employer –

Customer Experience Management has been a hot topic around our company lately.  You have been giving us many motivational talks about it, and there have a been a few “Customer Appreciation” programs, but there is something that would really help us out – leading by example.

The most frequent question I get from clients is how do we get our people to do something differently tomorrow. They are asking about execution from their top leaders, managers and front line teams. The executives have spoken of service excellence at many meetings and they don’t see implementation. Or they see too much variability and not enough accountability so it goes back to some people get it and others don’t.

Here are three thoughts:

The authors wrote in Industrial and Organizational Psychology that employees will feel — and act — engaged when their employer creates conditions that permit them to do so. The key condition for feeling engaged is fair treatment, which creates a feeling of trust and, in turn, feeling safe to be engaged.

A while ago I was engaged to do a customer service seminar for a city. One of the things they wanted to talk about was establishing customer service standards. So I began a search for other cities that had already established customer service standards to see what their experience had been.

My first search in Google was: “customer service standards”. The results surprised me.

During a recent radio interview, the show host asked me to comment on a pleasant subject – the economic recovery. With all of the recent doom and gloom, there are signs that things are beginning to turn around. Who knows how long the recovery will take, but the economy will most certainly recover.

During the discussion the host asked me, “What is your main suggestion for organizations in preparation for the economic recovery?” Without hesitation, I said that if organizations focus on one thing in preparation for the recovery, it should be this:

Not that we need to say it again, but more recent research confirms that increasing employee engagement increases performance. Most boardrooms see employee engagement as a key priority for the future and investment in engagement is set to grow — even in the current economic environment.

This is a key finding of the comprehensive study of engagement practice undertaken in the UK, commissioned by employee engagement consultancy, Engage Group.

An article appeared in Tuesday’s Wall Street Journal titled, “Firms Keep Brakes on Hiring: Unsure About Strength of Upturn, Employers Produce More With Fewer Workers.” The article notes that while hiring always lags behind economic recoveries, this time the lag is likely to be worse. Doubts about the strength of the recovery and concerns about the potential costs of health care reform are two of the reasons the WSJ says companies may be slower to replenish their employment ranks.

At AMA’s MPlanet conference I had the opportunity to be part of a special Blogger Q&A session with Mary Dillon, Executive VP and Global Chief Marketing Officer for McDonald’s. She talked about a strong focus on employees, reaching out to moms, and social media.

There are some employees who manage to withstand all kinds of criticism and negativity from management and find ways to brush it off and excel at work. Other employees, despite a supportive management team, fail to be productive.

I believe that people who work in an environment where doing their best is recognized have a better chance of feeling good about their work. They also have a better chance of becoming successful producers who enjoy pleasing customers.

A big mistake some companies make is they hire and manage people like they buy and manage equipment. They seem to believe people’s behaviors can be designed and managed like machines.

And a key tool in this strategy is the ever-present script. Most employees despise them. So do many customers. To a customer, a scripted employee sounds like a phony, uncaring employee.  This will not help you improve customer service.

I am sitting in my local coffee shop (a big brand, not Sbux) and wondering what I want to blog about. I am the only customer sitting in here on a Saturday afternoon, so perhaps the employees forgot about me.  What disturbs me is the LOUD conversation I am hearing behind the counter.

“Wow, can you believe three limos of high school students pulled up the other night after their dance and we had to make a whole bunch of lattes, iced teas, and frozen drinks? It took forever to close!”