Like most people, sales managers creating incentive plans want to do what’sright, but they also want to do what’s easy. That’s why cash is the mostcommonly used sales incentive – it’s easy, everybody wants it and itmotivates salespeople to achieve more. Or does it? In fact, according to a1999 survey conducted by Wirthlin Worldwide, of the 1,010 people who wereasked how they spent their last cash reward, 29 percent said they applied themoney to bills, 11 percent put it into savings, another 11 percent spent iton household items while 18 percent said they couldn’t remember what they didwith the money. Only a quarter replied that they had put the extra moneytoward anything unusual, like a special treat or travel.
That’s why cash is such a lousy incentive, say the experts. Instead ofviewing a cash reward as something out of the ordinary, people merelycalculate the bonus money into their overall compensation packages. Followingare a few other strikes against the cash incentive, according to AmericanExpress Incentive Services:
This Carrot Doesn’t Stick
Business rewards are typically divided into two categories: “sticky” and”slippery.” Sticky rewards are so called because they remain in people’sminds longer than slippery rewards, which quickly fade from recipients’memories. Cash is the classic slippery reward – let’s face it, how memorableis that paid gas bill from six months ago?
Where’s My Trophy?
Cash also lacks what industry insiders call “trophy value.” It’s unseemly tobrag to co-workers about a $1,000 bonus. But when your top seller tacks upthat family photo from his or her incentive trip to Hawaii, everyone in theoffice will see the lasting reminder of the rewards high achievementsdeliver.
Incentives shouldn’t inspire moral dilemmas. Yet when sales reps receivecash, they understandably feel guilty about spending the money on a shoppingspree or a weekend getaway. So they wind up putting the money into the kids’college fund or use it to pay the mortgage. Which is fine, except that itlacks the motivational punch you’re looking for from a sales incentive.Unlike cash, a gift certificate or trip of equal value can beaccepted and enjoyed free of guilt.