Daisy Mae Cooper
The aim of sales incentive programs is to engage your workforce and enhance productivity. However, some programs demotivate employees, increase costs, and hurt productivity. According to the people at Motivation Excellence, the good news is that recognizing these problems is all it takes to solve them.
The Complexity Trap
The worst error businesses make is having no one understand their programs. Some programs are so convoluted that staff will need a calculator, a spreadsheet, and perhaps a law degree to even attempt to figure out how much they can earn. Something is terribly wrong if your sales team spends more time on calculations than selling.
Keep your programs simple enough that anyone can explain them in two minutes or less. If a new employee can’t understand the basics on their first day, your program is too complicated. Salespeople want to focus on selling, not decoding bonus structures.
Complex programs also heighten skepticism. The inability to easily confirm their earnings results in the belief that the company is out to cheat them. This form of corporate skepticism is the nail in the coffin for motivation, even with the best business environment.
Setting Impossible Goals
Unattainable goals can be a major source of demotivation for a sales team. Some companies create policies whereby goals are set so high, only a handful of employees are able to earn any incentives. Such policies turn incentive programs into elusive prizes that most employees can never set their sights on.
Incentives should motivate all employees, not only the top performers. Goals should not be so daunting that they crush morale. A good benchmark to use would be that a minimum of 60% of the team is able to earn something with a solid amount of effort.
The All-or-Nothing Problem
There are many programs that stick to a cliff structure where people cross a set limit to reap great benefits or come close and get nothing in return. Such programs create massive issues as the deadline draws closer. The team might get overly aggressive in convincing clients to make purchases long before they are ready, which can hurt long-term sales relationships.
Cliff structures completely overlook the fact that businesses seldom function in clean, orderable pieces. Salespeople working at 95% effort work just as hard as those at 100%. Why should their effort be completely unrewarded?
Gradual rewards are more effective. Give small rewards for initial achievements, and bigger rewards for better results. This method keeps everyone engaged throughout.
Ignoring Team Dynamics
Programs focusing solely on individual performance risk fostering a negative rivalry among members of your sales team. When competing against colleagues becomes the norm, everyone suffers. Sales customers can sense the lack of cooperation among salespeople as they attempt to assist one another.
Promote teamwork by using team incentives. This mix encourages teamwork and individual recognition. Great sales programs use a mix of individual and group targets.
Forgetting About Timing
The timing issues with incentive programs often prove to be too complex to resolve. Losing motivation in annual incentive programs is common if there is a large gap between the reward and the incentive. Conversely, monthly programs might leave too little time for evaluation and therefore do not seem useful.
Combining the two opposing solutions and sticking with quarterly programs will strike a better balance between both motivation and achievability. This method avoids burnout, as it offers a clear goal and lighter work periods.
Conclusion
Whatever the problem may be with the programs currently in use, there is no reason to panic. By thoughtfully refining certain aspects, most challenges can be resolved. Programs that encourage participation will improve performance.
