Scott Testa didn't intend to become the poster boy
for creating bad sales incentive programs. In fact, the chief operating officer
for Mindbridge Software thought he'd done a great job developing an exciting
program that would inspire the company's 15-person sales force.
"How could this go wrong?" Testa remembers thinking when he kicked off the
program, which featured a long weekend at a destination of the winner's choice,
with a $3,000 ceiling for airfare and lodging combined. "We're a fast-growing
company, and we're always looking for good incentives to keep our people
motivated."
In retrospect, Testa realizes that he made a mistake by setting the bar for
winning the trip far too high. As he points out in a recent article appearing in
Workforce Management Magazine, the average Mindbridge rep would have
had to more than double his or her monthly sales for a full year to qualify. In
short the contest became a running joke among the sales staff, and was quickly
eliminated before the first quarter was over.
Regretfully, Testa is not alone in finding a way to foul up an employee reward
program. Other examples, both large and small, cited in the article include:
The California-based Fortune 500 insurance company that offered tickets to a Christmas pageant at a local cathedral as a sales reward. The only problem: about a third of the sales team members were Jewish. Angered over the insensitivity of the reward, the offended agents deliberately brought in only the bare minimum sales for the insurance and investment products they represented for six months. Eventually the CEO apologized, but not until the firm had lost an estimated $750,000 in sales.
Milliken & Company, a textile manufacturer that is usually lauded as an exemplary employee motivator, erred with a program designed to reward employees at one plant for meeting productivity or sales goals. Every month, winning employees were granted the use of a coveted parking space. One month's winner, a lab technician, never seemed to use the spot, however. Asked why, she explained that while the parking space was right outside the main entrance, her office was located on the other side of the complex, more than one-quarter of a mile away. "It was one of those lessons learned," says Craig Long, the company vice president of quality.
One high achieving rep at an insurance company, who had won every award the company had to offer, including salesperson of the year, eventually stopped bothering to attend the annual award ceremony. Noting the rep's absence, one manager decided to find out what was truly important to this particular salesperson. The manager discovered that the rep centered his life around his wife and three daughters, so the next year gave him a framed portrait of his family. The salesman was elated, and the company earned a great deal of goodwill with a key performer.
As this last example shows, a little legwork and diligence can do wonders for a company's motivational efforts. Other novel suggestions from the Workforce Management article include:
Forget flashy. Many companies today are moving away from the big-ticket incentives in favor of smaller, more inclusive company-wide incentives to reward employees for reaching targets. Group events also offer tangential benefits like improved overall morale and team building.
Solicit input. Employees are often the greatest untapped source of ideas for improving the company's performance. Often you don't even have to offer tangible rewards for good ideas – the only key factor is that employees hear back promptly about whether their suggestions are going to be implemented.
Motivate and educate. One novel approach to travel rewards is to offer employees the chance to attend career development or leadership training programs being held at desirable resorts. Winners can be expected to attend a certain number of meetings during the day, but then are free to spend the rest of their time enjoying the resort's many amenities.
(From SellingPower.com)