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Performance Measurement Approach

Performance Measurement Approach

CASE STUDY 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.



�� Performing client needs analysis to ensure that the major market services product can meet a
client�s 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

�� 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.

Performance management is central in the workplace as it provides a benchmark for
managers and supervisors to measure employee performance. Performance management is also
imperative to enable managers determine if employees can meet organizations objectives.


Performance measurement is a practice or collecting, analyzing and reporting individual
performance in an organization. It encompasses studying company’s processes to determine if
the business processes output are in line with the company’s objectives (Bititciet al., 2012 pg
The purpose of this paper is to come up with the most appropriate Performance
Measurement Approach to be employed by Paychex, Inc in assessing account executives. On
the same note, the paper discusses the notion that developing good relationships within the
industry is paramount for the success of Paychex, Inc.
Account executives at Paychex, Inc work on their own with little supervision from Their
managers. Apart from the headquarter office at Rochester, account executives work at different
offices nationwide. Their duties vary ranging from training new account executives, performing
client needs analysis, establishing clients on the host processing system, and supporting clients
during the initial stages in receiving payrolls. On the same note, account executives perform
administrative functions such as documentation, scheduling and making client calls among
other duties. Therefore, due to the nature of their duties, the best Performance Measurement
Approach that can be employed by managers to assess executive account performance is the
result based approach.
The pros for this approach is that it requires less time, lower cost, and the information
collected are objective oriented. The tool that will be employed in performance result based
approach is Management by Objectives (MBO). The managers at Paychex can set corporate
objectives, set and align account executive objectives, monitor their performance, evaluate their
performance based on their results (Jääskeläinen et al., 2012 pg 54). On the same note, the


managers should reward performing account executives as a way of motivating them to perform
even better.
The result based performance approach is ideal for this case because of the nature of
account executive jobs. That is, they work with minimal supervision from their managers. The
managers should, therefore, use the results of their duties to assess their performance.
Companies in the digital era are becoming more conscious of the importance of good
relationships within the organization and the external business environment. Be as it may, the
success of an organization may depend on having a good strong relationship with external
organizations within the industry. Good organization relationship with the external environment
helps fill gaps within the market and hence enable a company to focus on producing core
product and services.
Having a good relationship with other organization within the industry can help
Paychex Inc in the following ways: A good relationship within the industry can help the
organization to access international markets. That would not have been easy without good
relationships. Relationships with customers enable a company to develop products that fit
customer needs. And as such, develop better products that fit the entire market. Having good
networks with other stakeholders within the industry can enable a company to access resources
such as capital, intellectual property buildings, and many others (Justus Chris, 2011 nd).
Organizations work under association’s umbrella to help in increasing credibility, to spread
risks and rewards as well as increase standards in the adoption of new technology.
On the other hand, good relationships in the workplace can help in improving teamwork,
employee morale and as such increase productivity of the organization. Having a good team of


well-motivated employees is also paramount when it comes to improving the organization’s
For Paychex, the best performance appraisal method is absolute standards methods such
as Critical Incidents, Behaviorally Anchored Rating Scale (BARS) and Management by
Objectives (MBO). The best for evaluating account executives will be Management by
Objectives. This system is ideal because it aligns organizations objectives with the quantitative
measures such as profits, defects in units produced as well as the number of sales (Lunenburg,
2012 pg 3).
In conclusion, Paychex, Inc can use results-based approach to measuring the
performance of account executives. Result based approach is ideal because it is less costly,
objective oriented and less costly. By and large, organizations must have good relationships
within the industry as it helps in networking and enabling a company acquire other items that
would not have been otherwise easy. Finally, the best appraisal system Paychex can employ is
the absolute standard method using MBO tools.


Justus Chris (2011). ‘The Impact Of External Relationships On The Growth Of Young
Technology Companies’. Technology Innovation Management Review 1.2: n. pag. Web.
Retrieved on 15 June 2015 from http://timreview.ca/article/498.


Bititci, U., Garengo, P., Dörfler, V., & Nudurupati, S. (2012). Performance measurement:
Challenges for tomorrow*. International Journal of Management Reviews, 14(3), 305-
Lunenburg, F. C. (2012). Performance Appraisal: Methods and Rating Errors.International
Journal of Scholarly Academic Intellectual Diversity, 14(1), 1-9.
Jääskeläinen, A., Laihonen, H., Lönnqvist, A., Palvalin, M., Sillanpää, V., Pekkola, S., & Ukko,
J. (2012). A contingency approach to performance measurement in service
operations. Measuring Business Excellence, 16(1), 43-52.

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