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CASE STUDY 4-3 Choosing a Performance Measurement Approach at Paychex, Inc.

The following job description is for an account executive at Paychex, Inc. (www.paychex.com). Paychex, Inc., is a leading national provider of payroll, human resources, and benefits outsourcing solutions for small- to medium-sized businesses. Paychex is headquartered in Rochester, New York, but the company has more than 100 offices and serves hundreds of thousands of clients nationwide. Because account executives often make sales calls individually, their managers do not always directly observe their performance. Furthermore, managers are also responsible for sales in their markets and for staying up-to-date on payroll laws. However, account executives are responsible for training new account executives and networking in the industries in which they sell products. For example, if an account manager is responsible for retail companies, then that account executive is expected to attend retail trade shows and professional meetings to identify potential clients and to stay current with the issues facing the retail industry.

ACCOUNT EXECUTIVE JOB RESPONSIBILITIES Performing client needs analysis to ensure that the major market services product can meet a clients requirements and expectations. Establishing clients on the host processing system. Acting as primary contact for the client during the conversion process. Supporting clients during the first few payrolls.

Completing the required documentation to turn the client over to customer service for ongoing support. Scheduling and making client calls and, when necessary, supporting sales representatives in presales efforts. Keeping abreast of the major market services system and software changes, major changes and trends in the PC industry, and changes in wage and tax law.

1. Based on the above description, assess whether Paychex should use a behavior approach, a results approach, or a combination of both to measure performance.

2. Using the accompanying table as a guide, place check marks next to the descriptions that apply to the job of account executive. Explain why you chose the approach you did.

TABLE

Behavior approach to measuring performance is most appropriate when

The link between behaviors and results is not obvious

Outcomes occur in the distant future

Poor results are due to causes beyond the performers control.

Results approach to measuring performance is most appropriate when

workers are skilled in the necessary behaviors

Behaviors and results are obviously related

Results show consistent improvement over time

There are many ways to do the job right