Salesforce Incentive Schemes - Good And Bad Practice

Motivation Mistakes

Motivation Successes

Being too complicated for salespeople to work out for themselves

Being able to calculate the incentive ‘as it happens’

An annual incentive that is less than 15% of a person’s salary being talked about as a motivator, it is but only for the last quarter. It might be justified as a ‘why work here’ payout but it’s poor value as a ‘why work harder’ incentive

Closely connecting effort and reward, showing how additional input quickly generates additional rewards.

Capped incentives

Uncapped incentives

% of salary schemes, which are easy to administer but have little to do with perceived equity. Just because somebody earns more shouldn’t automatically mean they have a larger incentive payout.

Contribution based schemes. The people who achieve the most get the most. Junior people earning more than their managers should be possible (and common).

Misaligned schemes, ie the Sales Director’s incentives not being directly linked to the performance (and incentives) of their sales team’s

Aligned schemes. We are all in this together.

First past the post incentives, creating more losers (everybody else and the single winner) and too much internal competition.

Incentives for over target performance, everybody can now be a winner. People are now competing against their target (and by implication the competition) rather than their colleagues.

Salespeople being deep into Q1 even Q2 and have not yet been given their incentive plan

The incentive plan launched on day 1 Q1

Not being accurately calculated (and paid out) because people who do it see it as unimportant

Timely, to the penny payouts

Highly individualised, no team dimension

Personal targets, but with a team ‘kicker’