Hi All
I have been tasked to review our current service provider SLA, and included is the review of the current performance fee model, where there are penalities imposed on the Service Provider when they do not achieve over 95% of their KPIs. However, we are finding that the model is too lenient and there is little penalty to the SP if they do not achieve. Does anyone know of any good performance fee models they can share?
Thanks Saving Changes...
Sort By:
Rubin JenEducator/Trainer| Beyond ExecutionTurku, Finland
I would suggest 2 approaches to your question. First, if your KPIs are too lenient, then what is the impact around tightening them (assuming these KPIs are the right metrics your company cares about)? Instead of 95% acheivement, what about 98%. Second, you can also offer incentive KPIs. If customer satisfaction is a key KPI on top of turnaround time, then offer an incentive to not just meet, but exceed targets. Remember, SLAs are meant to support your business model, so make the KPIs work for you and your company. Saving Changes...
Anonymous
SLAs are tools and that's about it. Make sure they lead back to something tangible in your business strategy.
I echo Rubin's comments, use KPIs to monitor, set actionable feedback loops in your review process and collaborate with your vendor. Saving Changes...
