Incentives and Controls for Empowered Employees in the SEO Industry

Let’s say I own a house-painting company (I don’t, but let’s pretend) and you work for me. I charge my customers $100 per room to paint their house, and because I want your incentives as an employee to be aligned with the company’s incentives I pay you a per-room fee, just like the company gets paid. Let’s say it’s $50. Now we have a problem.

If you are paid $50 per room, what is your incentive? Your incentive is to paint as many rooms as fast as possible to maximize the amount of money you make in a given time period. At first blush this would seem to benefit both you and me, since I also make more money as you paint more rooms, but the problem is quality control. As speed increases, quality decreases, all other things being equal. On one extreme you could walk into a house, open a bucket of red paint, throw it against the wall, and run out the door and claim you’re done. If you, as my employees, painted rooms in this fashion I wouldn’t be in business very long and you wouldn’t have a job very long. On the other extreme you could paint the room using a 10-hair fine paintbrush and take 3 weeks to finish one wall. Just as in the first example, this is unsustainable. Somewhere in between is a level of quality that will make 99% of customers happy (there are always some customers who aren’t happy with anything, of course) and which can be reached quickly enough that $50 for you and $50 and a cost of $100 to the customer makes sense for all parties involved.

Neither employees nor business owners always have the long-term vision necessary to head off problems of this nature before they arise, but if’n they do, what can be done to fix the problem or prevent it in the first place?

You could simply say that I shouldn’t hire painters who will do a lame job, but that’s not the best solution. The better solution is to find a way to build both speed and quality into the system and that means adding an incentive for quality. But what would that be in this case? Here are a few ideas:

1. Customer feedback. The customer has an incentive to get a good paint job for their money, right? So feedback could be submitted directly to me, the owner (not the guy who did the paint job, of course), and I could set up a system whereby for every negative mark the painter loses a portion of that $50, or maybe he just has to go back and redo the paint job until it’s satisfactory.

2. Co-worker feedback. I could have another employee review the paint job. However, this would likely not be as accurate because there is a conflict of interest. After all, my employees have to work with each other, and it would be too easy for employees to be tempted to give each other good marks.

3. Management feedback. I could go check the paint job myself, but again, that builds a conflict of interest into the system.

It seems obvious that the best way to control is to use customer feedback data to create an incentive for my employees to do a high-quality job. But what if the situation is more complicated than that? After all, it’s not too hard for a customer to differentiate between bad, poor, sub-par, decent, and good paint jobs, even if they’ve never had any painting experience. But what if the service being provided is one where it is difficult for the customer to know whether the results are good, or where subjective measures can easily come into play? And what if it isn’t just a matter of one employee painting a room, but many employees working on a project, the end result of which can’t be directly tied to any one employee?

Of course my business is search engine optimization, so that’s what I’m thinking about. What is success when it comes to SEO? First, we have to look at what the customer wants. They want to make more money. If they sell something on their website, they want to sell more of it. If they get leads through their website then they want more leads. But sales and leads can be influenced by multiple factors, including many that have virtually nothing to do with SEO. These can include:

1. Website design

2. Usability factors

3. Navigation

4. Content

5. Offline marketing campaigns

6. Age of client’s domain

7. Newsworthiness of client’s company/industry

8. General nature of client’s industry

While some tracking can be done, much of what makes an SEO campaign successful can be mis-attributed to other marketing efforts and vice versa. Oh, and of course there’s the search engines themselves and their fickle nature. While search engine advertising can be tracked down to the smallest minutiae, SEO is different, and that lack of detailed trackability means an SEO firm can do a “good” job and still not attain the ultimate desired results. And because SEO is not well understood by most clients, it also means the client may not be able to judge the effectiveness of an SEO campaign the way they would the paint job in a room.

So let’s switch up the scenario a bit. Now I own an SEO company and you work for me as a link builder, building incoming links for my clients. Let’s say I want to pay you on a per-task basis, just as I would pay an employee who paints rooms. How do I do it and how do I control quality?

First of all, there are a number of ways I can set up the measurement of the task. The most obvious method would be for me to pay you based on the number of links you build. But once again, that creates a negative incentive we have to deal with, because your incentive is now to build as many links as fast as you can, but anybody who knows anything about link building knows there are varying degrees of quality when it comes to incoming links, and measuring that quality is not easy. There are links that are obviously good, links that are obviously bad, and a large gray area in between. Then there are permanent links vs. temporary links and reciprocal links vs. three-way links vs. parallel links.

One way to increase the incentive to build quality links would be to pay based on the number of links that get indexed by Google. But for many employees this would be too much to ask, since it takes control out of their hands and puts their fate in the hands of a finicky search engine that changes its mind about how to rank things on a regular basis (more than once per day, in fact).

But the larger problem here is that no matter what I do, your results are not directly tied to my results. You may do a great job and yet the customer may be unhappy with the results my company provides. Conversely, you may do a horrible job and yet the customer may end up thrilled with the overall results. So what’s the answer?

As it stands, it would seem the answer is to manage for quality as much as possible and refine along the way as needed, recognizing that perfection is unattainable. This makes for a business model that has some issues when it comes to scalability, one of which is sure to be customer satisfaction, since coming up with an objective measurement of success that fits all customers is virtually impossible. However, it is also these types of challenges that present opportunity and safety, since a business that is difficult to master presents a barrier to entry for competitors.

Once I figure it all out I’ll let you know. In the meantime if you have any ideas, or if you’ve worked in companies where employees were rewarded based on results but incentives had to be balanced to make sure the long-term results were in everyone’s best interests, let me know.