A warning to my readers, I tend to be a little hard nosed every once in a while. This is one of those times. I’m reacting to a cumulative build up of a number of conversations about compensation planning, incentives, and “motivating” sales people.
So many of the discussions focus on rewards and incentives for behaviors that should be conditions of continued employment.
When we employ people, we expect certain behaviors. We expect they act ethically and with integrity. That they come into work on time, work regular hours. That they complete their reports, keep managers informed (dare I say, use the CRM system), submit honest and timely expenses. We expect them to be team players and to support each other in our mutual success. We expect them to “buy into” the values, priorities, and goals of the company.
We expect these things of all employees. Those that are on straight salary and those that are on leveraged compensation plans. They become conditions of employment. Violating those conditions of employment violates the implicit “contract” we have with our people. There are consequences for violating these–most often warnings and coaching, perhaps leading to performance improvement plans (PIPS), perhaps leading to termination.
We expect every employee to represent our business positively. In casual conversations with friends, neighbors. At company or industry events. With suppliers, and customers. We encourage our people–all people, to find opportunities and to get them to the right people in sales. It’s all part of being a team player and being aligned with the company. These are all conditions of employment. Things for which we earn a salary. (By the way, these principles work the same way in 100% commission organizations as well–my own company is a perfect example).
Sometimes, I think organizations run into problems, because these conditions of employment are implicit and poorly defined—so people may not understand them, and unwittingly get into trouble. Not on the big things, but on the little things. So I think we need to be thoughtful about these, and be more explicit with everyone in the organization about our expectations of their behaviors and values in being “employed” by the company. I think we need to examine these behaviors and values as we interview candidates for jobs with our company.
Now back to sales. Too often, I see sales managers trying to incent or reward behaviors that should be conditions of employment. Providing bonuses or compensation for using the CRM system (yes, some organizations do this), providing compensation for sharing leads that are outside a sales person’s territory. Soon we will be providing incentives to show up to work “on time.”
Incentives, gamification, contests are all important and can help drive performance. But let’s reserve them for the things that are most important and not use them for things that should be conditions of employment. The value of these incentives become reduced when we use them for everything–and frankly, it’s bad management/leadership.
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