It’s obviously a sign of intent and good intent at that but I can see a couple of major pitfalls besides the obvious one of how to measure something so subjective. First, customers may not respond well to being asked their opinions either in person or on the phone. Secondly, if the objective is to build customer loyalty, you have to take into account that frequency of shop depends on frequency of need and Home Depot doesn’t necessarily have the items that the average shopper needs week in and week out. So excellent customer service isn’t the only factor that will make people visit the store again and again.

No, it bothers me too, Ian. If behaviorism were a religion, business people would be fundamentalists. Rewards and punishments are almost the only answer anyone can seem to come up with, we love them so much. But as you suggest, Ian, and as dozens of our studies have shown, incentives create an interest in the reward, NOT in the behavior the the incentive is to produce. This is all extrinsic motivation. Our studies show how intrinsic motivation can be triggered and promoted, but to keep my reply brief and interesting, I shall not go into details here. Bottom line: this is a poor solution that will yield poor results, but a solution that many will likely applaud.

Kudos to Home Depot for a) being proactive and b) putting their money where their mouth is in relation to customer service. While customer service is different to different people and customer service is whatever the customer perceives it to be, it is not as subjective as people think it is. Our company, for the past 26 years, has helped some of the nation’s largest retailers define, measure, analyze and improve customer service and customer experience. It appears that Home Depot has defined, is measuring, is analyzing and looking to improve. Additionally, it is our experience that management must do something with all the data and analysis. Home Depot is doing just that. They are making a statement. The $25,000 per store does number of things: 1) it shows that management is committed to improving customer service, 2) it acts as incentive for the employees (without them there is no customer service), 3) it shows the consumer that customer service and the customer experience are important to the company and 4) it applies extra pressure… Read more »

Several retail chains use third party mystery shopping services to rate customer service. They use behavioral-based assessments that are less likely to be politically-based. Anything not readily provable will make the reward program a demoralizing force not a motivating force.

Mazlow where are you? Speak to us from beyond. Wouldn’t it be a breakthrough to find employees who serve customers superbly because they actually want to? Wouldn’t it be amazing to have a company where everyone is so thrilled with its vision and purpose that they naturally go above and beyond the call? Every once in a while at Home Depot I run into an employee who just loves doing what he or she does and it just makes you want to buy something. Most of the rest just point and grunt. Or pretend they know what they’re talking about. Well, the reasoning is, if they won’t serve people out of their own pride and love of a job well done – let’s give them money to do it. Who cares what they’re real motivation is. We’ve known forever that external rewards soon come to be ‘expected’ and behavior reverts to the lowest common denominator. To change the behavior you’ve got to ante up more stuff. Then the added costs make the company cut back… Read more »

While it’s a nice step in the right direction, I’m not certain this program has enough reach and continuity to make the difference that HD needs.

Shoppers who get superior service and attention shop more often at the stores that treat them well and help them fill their needs. When your mantra is “You Can Do It, We Can Help…” you’re telling your customers “we’re all about service,” which means EVERY TIME a shopper needs help, you have the people there that can really help them with the solution they are looking for.

Incentivizing employees is not the total answer. Unless you have knowledgeable people that can really provide the shopper with the right information, you won’t meet their expectations and live your mission. That leads to investing in hiring the right people, and training them to really understand DIY “solutions” so they can consult the shoppers with professional recommendations.

Engaging the shopper more is good, but you better be able to give them the right answers to fill their needs.

It’s impossible for any company to set up a totally fair incentive program. However, you have to give Home Depot credit for at least admitting they have a problem and doing something about it — unlike other retailers who never admit anything is wrong. The real value in the incentive program will only come if they maintain it for several years and continue to keep it fresh for the associates, and if they combine it with other initiatives such as training, management support, etc. It certainly continues to demonstrate the different problems retailers face in dealing with people; we can now see wide differences in how three of the largest retailers address employee issues differently, with Wal-Mart and its low-pay model; Costco with its high-pay and now Home Depot using incentive programs.

This is certainly better than doing nothing. I like the programs Publix and Hy-Vee have. They offer employees stock in the company based on performance and it is fair to all employees. They have been doing this for years. A small $25,000 bonus budget per store will not go too far and my guess is that it will be handed out to popular employees. The pot is just too small to make an impact.

Home Depot is a perfect example of a major, dominant retailer that had superior customer service! Interestingly, like most corporations, the new Executive Management thought it could ride on the coat tails of its sales associate education program, and stop investing in it.

What does that convey to the store level associates? Right now, we have little interest in furthering your knowledge on our business, but carry on…be motivated.

So, here comes a new “big dollar” contest program with a new education effort to rejuvenate the most valuable assets, the store sales associate. Do you think money speaks louder, or does showing interest in your workforce everyday of the year… year, after year?

After reading through everyone’s comments, perhaps it might just be easier for Home Depot to follow Costco’s labor model of hiring people who are a step up in class and just paying them more money.

My husband and I shop at Home Depot quite often. We are not contractors but we own several rental properties and do a lot of our own work. My husband’s frustration starts with his inability to find the item required to complete the job. He then cannot find the expertise required to give him some alternative solutions. He has to look through the aisles to find someone to help him and most times that person has to find someone else who may or may not have more expertise. I think the people working there want to do good a job but just don’t have the knowledge required. This makes them frustrated and it comes across in their response to my husband who then in turn thinks they have an attitude. He leaves the store in a bad mood without any products vowing to go somewhere else, but Home Depot has more of the products he needs than anywhere else so he does return. He has gone to Lowes but they do not have the quality/quantity… Read more »

When I have to go into a HD and I can find a Home Depot employee – I do talk to them about why the store is so understaffed and apathetic employees and boy do I get an earfull!

This campaign will juice a few employees. But the reality is the $25,000 per quarter is usually split between the entire store. In a store with 100 employee thats $250; minus tax, thats $170 per employee: IF it’s split evenly. If the store has a staff of 200 then its $125per employee or about $98 after taxes. Wow.

Employees take the money but still have that gnawing contempt or apathy for another “Company” program and as a result, these attitudes are passed onto the customer.

Based on what I have heard what might juice the full time “experienced” employee and (decrease the high turnover rates)is:

1.a higher hourly wage more like $20 per hour than the current average of $7-9per hour.

2.A set weekly schedule.

3.Elimination of the Mandatory Monthly Sunday Meeting.

Right idea, maybe the wrong company. As was mentioned earlier, Home Depot’s customer service problems go deeper than just incentivizing its employees. Training them would be good. Having a few more on the floor would be good. Overall, the company has to make good on its brand promise. If HD is now promising customer centricity – boy do they have a long way to go.

For one thing, I’d love to get the rebate for the washer and dryer I sent in over 4 months ago. The company’s helpful web site tells me “the rebate is being processed.” That’s just one story in a litany of customer service failures.

I think of it as an identity crisis. The company isn’t quite sure what it wants to be, or what it stands for anymore. The obvious question: Why do I keep shopping there? The obvious answer: no Lowe’s nearby.

It’s not about the money, folks! It’s about the unity that comes from a team being focused on something larger than themselves. We humans are, by nature, competitive. Put us together and tell us that we are a team, give us a greater good and we actually might help each other out. we might become more supportive etc. This is a very smart idea of HDs. Can you just imagine where service levels might go when it doesn’t matter which individual gets the recognition? You may be interested in building a deck but the person you are talking to knows about paint. What would encourage that sales person to walk you to someone who does know about building decks? Unity, camaraderie, the spirit of being part of the team! That is what would do it and exactly what Bernie and Arthur instituted when they created HD. That spirit has been lost but I am thrilled to see it being re-instituted and I am certain. And by the way, if you have ever worked in a… Read more »

Axiom:

“Inspect what you expect.”

Author Unknown

Truth:

“You get activity around that which you manage. You get results around that which you reward.”

Benjamin Franklin

I fear I’m on thin ice disagreeing with pro’s like Ian and Race in this one, but my money is on a positive result for Home Depot. And it doesn’t take a lot of money to make a real difference when it is used as a periodic, tangible and accessible reward. Employees focus on achieving the rewards that they can most directly influence. Assuming this incentive is offered at the individual level, a relatively small reward can go a long way.

With regards to the comments on increasing product knowledge of the HD associates, we would point out that it is the willingness to SHARE that knowledge with the customer, and the enthusiasm with which one does so, that has a much greater impact on a shopper’s perception of “good customer service.” Knowledgeable curmudgeons abound!

Another thing wrong with this is idea is that Home Depot’s clientele is over 50% contractors. They need very little customer service as they are in the store all the time and usually know where the item is that they need. Also, getting them to follow-up with and IVR or internet survey – good luck with that. Actually, this is better suited for Lowes, as they have 70% or more consumer-centric customers.

racford is perfectly correct. Money, who will say no to it? But strong education is always good.

I work at Home Depot 7244 in Huntsville Canada, and since we’ve opened in May 2006, we have gotten “JUICED” every month until they went quarterly and have got JUICED for the quarterlies as well. Our SM, Chuck, is and should be very proud of all the associates working with him for this achievement. I know we all enjoy the extra bonus that comes with getting Juiced. I think it’s a great program. It enables the social committee to hold functions for the associates on a regular basis which in turn motivates them to do their best all the time.

I shop the green store, the blue store and the orange store. The orange store being the current topic. I remember when the blue store opened in Fairborn, OH. They had ringers (people intended to give them an “unfair” advantage) to open the store. These people came from Tennessee, a state renowned for politeness and possessing four words in their vocabulary not found in abundance in our area. Those four words being “sir,” “ma’am,” “please,” and “thank you,” AND ALL THE BEHAVIOR ASSOCIATED WITH POLITENESS. They also had signage visible from the other side of the store that TOLD ME EXACTLY WHERE THE ITEMS I WANTED WERE TO BE FOUND! I then went to the red store nearby and explained that Lowe’s was going to kill them because blue store had organization vs. price which the red store had in its advantage (I later heard the plan cost about one million dollars to lay out the blue store.) The ringers are gone, but I still have a warm spot for their memory, and the signage… Read more »