Abstract
This paper by Kakati asserts that customer satisfaction should be the primary driver and measure of employees' performance and hence there is need for linking performance bonus to the customer satisfaction index. Subsequently, it explores theoretical and practical issues regarding the measurement of customer satisfaction and presents three alternative models (linear, conjunctive, and disjunctive) for measuring overall customer satisfaction level. Further, it provides an ideal bonus plan that ties up bonus to the index of customer satisfaction and payoff matrix. Finally, it presents a case study in a hospital industry where a similar bonus plan has been very recently put into operation.