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How effective is your sales rewards and incentives program? You may be surprised…
Author: Dr. David Brookmire
There are three unprecedented generations in the workplace today—with different work styles and preferences, values, expectations, needs, behaviors, beliefs, and goals. Nowhere is this more evident than in sales, where the latest generation, Generation Y, will soon become the most common generation.
So how can sales managers, in the process of evaluating and creating their sales promotion systems, ensure that they motivate every generation of sales professionals? What things should they consider? Do their reward and incentive packages motivate their salespeople to meet or exceed expectations? How do they know?
Here are some helpful tips every sales manager should know when it comes to motivating sales professionals:
1. Consider how your reward structure will appeal to different generations of your salespeople:
How many sales incentive packages and benefits are designed to meet the needs of multiple generations? Most incentive packages have a common theme of benefits based on achieving various levels of sales and profit targets, including:
- Cash (e.g. cash bonus, share subsidy)
- Non-working hours (e.g. extra vacation days, sabbaticals)
- Recognition (e.g. among peers, company wide)
- Development (e.g. expanding responsibilities, paying for tuition)
- Gifts (e.g. equipment, all travel expenses)
- Extended retirement benefits and other types or benefits.
At first glance, this seems like a lot of variety, right? But what kinds of rewards motivate each generation? Offering Boomers a day at Six Flags amusement park or Generation Yers a day off at a corporate getaway can’t really be considered a “reward.” Do all the “tried and tested” incentives used by most sales organizations have a motivational power to increase performance to achieve goals, or do they create moderate motivation to achieve a goal or no motivation at all?
The point is, you need to know what works best for different generations of salespeople in order to make strategic and tactical decisions about your rewards, incentives, and benefits. If you do it right, you will greatly improve your sales performance as you will have the key ingredient needed to attract, retain and motivate generational excellence.
2. On the other hand, don’t get caught up in the hype about generational differences:
There is a lot of research on what internal motives make each generation achieve peak results in their professional activities. For example, according to Lancaster and Stillman (When generations collide 2002), boomers are motivated by money, title, recognition; Generation X thanks to freedom; and Gen Ys significant work. Orrell (Millennials Incorporated, 2008) recommended that Generation Y be motivated by recognition, greater challenges, and constant stimulation.
However, in our recent study of what motivates sales professionals in each generation, we found that when it comes to sales incentives, cash still plays a major role for all generations, especially in today’s world. economy.
In difficult economic times, it is tempting to resort to non-monetary incentives (such as time off, internal training programs, recognition, etc.) to motivate sales staff. With all the hype that some generations of workers care less about cash, many companies are trying to tighten their belts by finding alternative rewards. However, in the end, despite intergenerational differences in motivation and job satisfaction, tough economic times also affect your employees, and money concerns will quickly outweigh any other interest in professional development or recognition opportunities.
Generation Y examples:
The Generation Y we surveyed overwhelmingly chose cash incentives over other types of sales as the top reward that motivates them to meet and exceed performance goals:
- Cash bonus (89%)
- Base salary increase (86%)
- All expenses paid for the trip (64%)
- Promotion (61%)
- Additional vacation days (55%)
- Flexible working hours (53%)
Also, while a lot has been written about Gen Y needing recognition, challenge, and stimulation in the workplace, rewards and incentives, such as receiving a thank you note from an executive or meeting company executives, are placed at the bottom of our results, the posts are terrible. figures less than 15%.
Also Read 10 Things Generation won’t pay for.
3. Regularly reevaluate your program:
If you are truly interested in attracting, hiring, and retaining the best sales people, you need to constantly check how well your compensation programs are meeting the needs of your sales force. Don’t just trust the way it’s always been done or what you read on the news about what’s really important. Ask your employees. Get their feedback on what motivates them and their level of job satisfaction.
Keep in mind that the same economic pressures your company is experiencing also have a profound effect on your sales force. In fact, difficult economic conditions make their job difficult, so you should review your sales targets benchmarks to make sure your salespeople see their performance goals as realistic and achievable.
Finally, make your rewards programs flexible and review their effectiveness frequently. Unless you reevaluate your compensation structure at least twice a year, you may be surprised to find yourself offering sand to someone in the desert when they really need water. Keep up the good work and they tend to look elsewhere for what they need.
