The Link Between Incentives and Sales Culture
How familiar does this scenario sound? George, a customer-facing employee at an established sales company stands at the water cooler and complains to a coworker that his immediate manager is incompetent, and just doesn’t get it. “I could do his job,” says George, as he goes on to list many specific examples of his boss’s management shortcomings. Unfortunately, this mentality is very commonplace, and is a detrimental aspect of many workplace cultures.
What creates a culture that makes this sort of problem seem ordinary? Believe it or not, this could be a side effect of not having a proper sales incentive program in place.
The ‘Peter Principal’
Recently on the Hidden Brain social science podcast, Kelly Shue of Yale University explained the ‘Peter Principal’ as “an idea that the types of skills that lead to success at one level within the organizational hierarchy may not be the same types of skills that lead to success in the next level in the hierarchy.” In a nutshell, this is why we get bad sales managers. Rather than rewarding good work with incentives, many successful salespeople are being promoted to managers even when they are not equipped successfully manage and motivate a team of salespeople.
Sales Incentive Programs
So how do we fight this “bad manager” epidemic? Shanker Vedantam on Hidden Brain provides this suggestion: “One idea is to have two tracks. You reward highly productive people through incentives, and you promote the people who have people skills.” This is extremely important, because you want your most talented salespeople to continue to be positive contributors, but still feel rewarded for their efforts.
In order to create a culture with these two tracks, it is important to have a well-defined sales incentive program strategy. This has been tangibly explored, with some studies showing bottom-line sales increases of up to 30 percent for companies with excellent cultures.
How Do We Fix It?
Once you have come to the conclusion that you need a sales incentive program to keep your top performers (who otherwise might not be good managers) engaged and motivated, where do you start? The first thing you need to do is get leadership involved. Make sure they fully understand the problem you are trying to solve. From there, start designing your program! Don’t be afraid to get creative with program elements, such as competitions, PTO, and sweepstakes. Partner up with an incentive company, if necessary.
Conclusion
Not every successful salesperson has the skills necessary to be a manager. However, you still need to retain their talent and keep them engaged with a sales incentive program. Implementing a well-defined, creative sales incentive program will help keep you on the right track, and finding the right strategic partner to help you define a program could be a key step in defining the right culture.
Sources:
Hidden Brain, NPR
Inc.
