Expand Your Incentive Horizons

By Malcolm Fleschner

It’s something of a paradox of sales management: Many incentive programs reward only top performers, seemingly the very people who need the least external motivational push to reach lofty achievement levels. Meanwhile average performers, who know from the start that they can never compete with the top dogs, opt not to even try. Motivation and recognition expert Bob Nelson (www.nelson-motivation.com) doesn’t think this is much of a strategy, but he says he understands why it’s so prevalent.

“Some of it is tradition,” he explains, “as in the President’s Club or the Million Dollar Roundtable. The logic is that if everyone sees that the top salesperson gets to go to Hawaii all salespeople will be motivated to work harder to achieve that goal, get the trip and the adulation and envy of their peers. This supposedly taps into the competitive spirit of sales. The problem is, if the same seasoned salesperson gets the trip year after year, the great majority of other sales folks will stop trying because they know it is not likely they will every unseat that top performer.”

Instead of having an absolute financial goal, Nelson suggests sales organizations strive to set relative goals for each salesperson according to the potential for sales in each sales territory. “Place the focus on each person competing against his or her individual sales goal so that every salesperson has a chance to win instead of recognizing a single top salesperson,” he says. “Or have a combination of goals, such as top financial producers, best against sales goals, most improved and so on. Of course, any approach can be gamed, so you need to constantly balance desired results against fairness.”

Nelson does not recommend abandoning the idea of offering choice rewards to your team’s highest achiever. Quite the contrary – he merely feels that companies can reach higher goals by adding to the mix incentives with broader appeal. “If what you are doing is working for your top sales folks, continue that while incrementally adding new incentive elements to encourage those at the second and third level of sales,” he says.

“As important as the financial incentives are for sales reps, don’t forget to recognize and reward the sales support people who help the sales team achieve their goals – or the entire company, for that matter, if the company’s sales goals are achieved!” says Nelson. “You might even provide sales staff recognition tools, such as gift certificates, as a thank you to staff members who are helpful.”

Another alternative Nelson suggests is to expand nonmonetary recognition. For example, one of the honors of being a top performer might be getting to share what you do with the team so others can learn.

Nelson acknowledges that not every member of the sales team, particularly the perennial winners, will welcome changes to the incentive program. Anticipate these sentiments, he says, and you will have a better chance of making a successful transition.

“Whenever you make any type of change, people tend to focus on what is lost not what is gained,” he says. “So involve your salespeople in your thinking and work to make the changes positive.” Nelson recommends sticking with any change for at least a year before doing fine tuning so it doesn’t look like you are changing the rules on people and so they can gain momentum and get stay excited about their goals.