Popular Posts

Sunday, 15 December 2013

Thinking of Incentives for Your People? Are They Really Coin-Operated?

The vexed question of incentives has raised its head again this week and the problem is that the client can’t decide whether it is commission, bonus, performance related or discretionary or merely a matter of recognition.  In the end he just feels that he needs to encourage the individual to perform better. 

The question to be asked is why does he consider it necessary to pay someone more for doing the job that they were employed to do in the first place and are paid to do anyway? 

The news this week that Lloyds TSB bank has been fined £28M for putting in an “incentive” scheme which frankly bullied the customers into buying products that they didn’t need and didn’t want merely strengthens the argument. 

It may be perceived that I am not a fan of incentives or at least of financial incentives.  The American psychologist Frederick Herzberg said that the real factors which contribute to motivation do not include salary or indeed financial incentives. 

On the other hand people are motivated far more by factors such as achievement, success, and reward in the form of praise or recognition. 

I firmly believe in any case that we cannot motivate people; it is arrogant to suggest that we can.  What we are able to do, however, is to provide them with an environment and a style of management that will encourage them to be self-motivated to perform. 

There are so many examples that justify that statement.  I recall the story of an office worker who had stayed behind late in the evening to finish a task which was rated as very important and, in this case, without being asked to do so.   

The manager was sufficiently impressed by this selfless attitude that he sent a thank- you card and a bunch of flowers to her home.  Six months later a colleague was at the house and noticed that the card was still on display on the mantelpiece. 

The best sales force I have experienced was a large (120 strong) engineering group based all round the UK in a number of branch offices.  That sales force was paid on the basis of flat salary with no commission or bonus or indeed any financial incentive. 

They were, it is true, paid rather over the market rate but they earned their pay without any doubt.  One of the most effective members of that sales force was my old sales mentor, Phil Copp, the Sage of Wythenshawe, who wouldn’t even have understood the need for so-called incentives. 

Perhaps he was typical of the old school; committed, honourable, loyal and hard working and that is no bad thing.  His greatest attribute was that he kept very firmly in touch with all his customers whether they were large or small. 

He would always go in to see the engineer after he had installed our equipment to check that everything was going well and that the engineer was satisfied. 

I would suggest that this sort of follow-up call is not usually at the forefront of the thinking of the commission salesman (or woman).  Their incentive is to make the sale and get the hell out to see another potential customer, not to hang around or to make another visit merely to see if the customer is happy. 

It is a decision for management to make; do we just want sales or do we want satisfied customers who appreciate good service and after-sales service? 

Instead of financial incentives, think of a few ideas to encourage your seals people to think more of giving great service to your customers and ditch those incentives which don’t always do the job anyway. 

To generalise, most people are not coin operated and it is an insult to suggest that they are.  People react favourably to success, praise and encouragement and delivery of that is entirely in the hands of the leadership.
 
 
Download my book "Leading to Success" from the Amazon Kindle store
Follow me on LinkedIn, Twitter and Facebook
 
 

 

 

No comments: