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The Compensation Manuscript - Are you driving compliance or complaints?

Posted by Brady Dolan on Sep 12, 2017

Red Ring Binder with Inscription Compliance on Background of Working Table with Office Supplies, Laptop, Reports. Toned Illustration. Business Concept on Blurred Background..jpeg

At debt collection agencies, compensation programs have a direct impact on employee behavior. When staff are under a largely performance-based structure, they tend to use non-standard or aggressive behaviors in order to generate as much income as possible. These types of tactics can cause excessive complaints and put an agency out of compliance with the Consumer Financial Protection Bureau. In order to increase compliance and reduce complaints, agencies need to find a balanced compensation system that increases morale and adherence to rules while still promoting high performance.

Monitor with Technology
Monitoring individual employee behavior is crucial to discovering how changes in compensation affect compliance and complaints. Advanced software can collect and analyze language to see which employees are using the correct words during their calls. Debt collectors who are complaint can benefit from more favorable bonus structures while those who aren't can receive further training. As client and regulator needs change over time, active monitoring will ensure employees are adapting to shifting requirements. 

Money Matters
Luck can play a huge factor in the success rate of any collection agent during any particular month. This volatility, in a compensation structure focused on performance, can mean a lot of volatility in income month to month. The stress can cause employees to act desperately in their collection practices, driving up complaints and compliance issues. By increasing base salary, agents will have an easier time following guidelines and treating debtors in a sensitive manner. In addition, compensation tied to the compliance and quality of calls, rather than just results, will reinforce good habits. Disincentives can be used for non-compliant behavior, but excessive penalties can reduce overall employee morale and may even be illegal according to the Fair Labor Standards Act. 

Topics: Compliance