His Boss’s Greedy Plan to Cut Costs Backfires Spectacularly

A tech working for a small IT MSP company experienced a decline in customer service after the boss replaced their requested raise with a KPI-based bonus system, ultimately resulting in the loss of half the company’s clients and multiple techs to quit.

An Experienced Team and Dedicated Staff

The story revolves around a man who worked at a small IT MSP company five years ago.

The company had four full-time technicians, with the newest addition to the team having around five years of experience, while the most experienced technician had almost 15 years of experience. 

The team was responsible for managing around a 1,000 PCs and 20 servers, which were spread across 30 different clients.

Customer Service Always Came First

The work for the team was contract-based or lump-sum, which meant they did not have to worry about how much time they spent on a problem or how much it would cost the client.

An Account Manager handled all billing and client-related issues, which allowed the team to focus solely on their technical duties without having to deal with any other distractions.

The man had the most experience in the team and was also the most self-motivated. He often arrived early to work and tackled the tickets that had come in after hours, providing assistance to other technicians who encountered complex problems. 

The team referred to the individual as the “Senior Tech,” despite not being his official title.

Refused a Salary Increase

After two years of working at the company, the man decided to approach the owner about a raise.

He came prepared with information showing he had closed the most tickets and received the most positive feedback from clients in a survey conducted by the company. 

While the owner agreed to provide a raise, he stated he needed time to think about how much it should be, and that they would get back to the man.

KPIs and Bonusses

A few weeks later, the owner called a company meeting and announced there would be no more raises. Instead, the owner introduced KPIs (Key Performance Indicators), and the entire technical team would receive weekly bonuses based on achieving these numbers. 

The man did not like this new system, as it meant their pay was now dependent on the performance of the entire team, not just their own.

It later emerged that another technician had also asked for a raise, so the owner’s solution was to pay both of them less by introducing the bonus system.

Gaming the System

The KPIs themselves were simple enough, and the team quickly learned how to game the system to their advantage.

The system measured the time it took to acknowledge a ticket, and if the team took longer than 15 minutes, the score for that ticket would be zero. 

There were ten different KPIs to hit, including the time it took to complete a ticket once it was opened. If the team’s total score for the week was above 90, they would each receive a $100 bonus.

The man voiced his concerns to the owner about this bonus system, as it could cause their customer service to drop. However, the owner brushed off their concerns and instructed them to “Just hit the KPIs.” 

Problems Arose

As a result, the team learned how to acknowledge tickets without actually calling clients. This caused a significant problem when a client put in a low-priority ticket and asked for it to be scheduled for the following week. 

In these cases, the team would start hounding the client to schedule it sooner, and if they were not available, they would simply close the ticket to hit their KPIs.

While the team was successful in hitting their KPIs and receiving bonuses every week, it came at the cost of their customer service, which had previously been excellent.

Endless Complaints

The company received multiple complaints every week, causing stress for the team, who started fighting when someone missed a KPI. 

They even had to work late on Fridays to try and hit those last few numbers.

After two months of implementing the KPI-based bonus system, the owner finally realized the grave mistake he had made. He acknowledged that it caused a significant drop in customer service, which was never a problem before.

Without granting the raise that the man and one other employee had requested earlier, the owner removed the bonus system and asked the team to return to their previous work setup. 

Already Looking for Another Job

Unfortunately, by this time, the man had already become so stressed out that he had started looking for another job. Also, the company had already lost two clients due to the decline in customer service.

As a result, the man was the first to submit his two weeks’ notice, and to the owner’s dismay, the other three techs followed suit.

In the end, the company lost over half of its clients, and the owner was forced to hire several new techs to cover the work that the departing employees left behind.

The owner had to pay these new hires over 20% more than what the man initially requested in terms of salary raise.

Just Take a Hot Minute…

Grumpyoldman said, “If only more bosses would take a hot minute to check how much it would cost them to hire a new employee of equivalent experience before denying the raise requested, they’d probably realize that 9 times out of 10, the raise is MUCH cheaper.” 

Swiggy1957 added, “Onboarding a new employee can cost between 2 and 5 times as much as a current employee’s salary. The more technical skill needed, the more it costs.”

Have you ever been in a similar situation? Do employers commonly make work harder for themselves to avoid giving hardworking employees a raise?

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Featured Image Credit: Shutterstock / Oleg Golovnev. The people shown in the images are for illustrative purposes only, not the actual people featured in the story.

Source: Reddit