Creative Group brought together three behavioral experts to discuss common mistakes leaders make when it comes to incentive program design. We’ll unpack a new “sin” every other week. Follow along to see if you are committing any of these transgressions.
Sin 6: LOWER PERFORMERS CAN’T WIN
Your Inclination: It would demoralize the top reps if a lower performer won the big prize.
The Argument Against It: Create rules that encourage performance, rather than punish.
While at first this sounds like Sin 1 [INCENTIVES ARE REWARDS FOR TOP PERFORMERS ONLY], it comes to light under a different psychological bias. The bias of disallowing lower performers speaks to a culture of punishment rather than encouragement. Such a bias will undoubtedly mitigate your results because employees exert more effort when they feel psychologically safe (and less effort when they feel unsafe).
The idea of intentionally excluding certain groups of reps from your incentive can be strategically viable; however, excluding reps with the purpose of demeaning them will weaken the results. It’s better to use incentives as a way to focus particular groups of reps on particular business problems. Just don’t do it at the exclusion of the rest of the sales force. If one group of reps gets an incentive, you’ll maximize your results if you design opportunities for all the reps to earn in ways that are relevant to them.
Consider a portfolio of earning opportunities such as pure sales growth, most new accounts, highest profit account, or almost any combination of measures that are good for your business. Engaging more people drives success — ALWAYS. The more reps you have rowing the boat, the faster and farther it will go. Why not maximize the results with rules that enable rather than disable; enhance rather than hinder?
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