Stevens is Vice President of R&D at Chally Group Worldwide, a global leadership, sales potential, and performance measurement firm.
[Go here for Mistakes 1 to 6]
MISTAKE 7: Being a Do-Gooder
Since most sales managers enjoy influencing other people, they tend to pride themselves on improvements they see in their sales forces. They have a natural tendency to spend too much time on individuals who are poor performers and, therefore, more in need of improvement. This tendency, popularly called “do-gooder” management, has no place in a successful incentive program. If you are a do-gooder, fight the urge to make special concessions to poor performers.
MISTAKE 8: Being Inflexible
Too often, contest rules and prize choices are clad in iron, and it becomes impossible to improvise rewards that may be more appropriate in a specific situation with a given winner, says Stevens.
For instance, a company once offered a top prize of a year’s use of an automobile. It was won by an antique buff who owned classic cars that were all more attractive and glamorous than the prize automobile. And because the car was a rental, it was not transferable. He had no cash value and gained no satisfaction from winning the prize.
MISTAKE 9: Hoping for X While Rewarding Z
Make sure to gear incentive rewards to reaching the company’s real goal. Many sales managers will talk about goal X but go on to design an incentive plan predicated on reaching goal Z, says Stevens.
For example, a sales manager kicks off a contest by telling salespeople they need to develop long-term customer relationships. Then the manager reveals that incentive points are based on the amount of sales dollars accumulated. This usually happens because Z is easier to evaluate than X and managers are afraid to try out an untested system.
The disconnect frustrates top salespeople.
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MISTAKE 10: Forgetting that Good Salespeople Always Work for Their Own Good First, Not the Company’s
Sales managers are usually paid a set salary and so are motivated by the prospect of promotion and advanced status in the company. They often forget that when a salesperson is not performing up to par, it is because he feels there is not enough in it for him or her. When choosing incentive awards, then, be sure to find out what would make it worth that salesperson’s while. Sales force input is crucial to all aspects of incentive planning, says Stevens.
In summary, says Stevens, the next time you find yourself planning an incentive contest, try a new approach. Imagine your salespeople as customers. Identify their needs and what segment of the force offers the most promise. Of course, don’t forget to figure in a profit for the company!
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I see your point about inflexibility, but in the example you provide, the salesperson presumably knew about the prize all along and nonetheless did well. You have to wonder why. Perhaps, as many studies have indicated, employees aren’t driven primarily by financial considerations–and the recognition alone helped motivate him.
That inghist would have saved us a lot of effort early on.