Are Incentives for Team Selling a Recipe for Disaster?

Well the cop out answer is no and yes.  They certainly can be if they are not well planned in the first place.  And more importantly if you don’t account for the metrics of the different departments involved, how they are measured for performance and how they are compensated, you could be headed for a calamity.

Here’s a simple example:

A sales force is challenged to sell more of their base product, let’s say a sophisticated and expensive software system.  The VP Sales offers an incentive to the sales force for incremental sales especially to new customers.  However to make the sale, the sales force must bring in service technicians because the system requires expensive implementations.  In addition engineering needs to be involved to make sure it is a proper fit and includes the proper features to do the job.  In this example lets’ assume that the sales force is responsible for managing the team.

As tradeoffs between product features and other services can exist, the sales force opts to defer features that they feel (right or wrong) can be managed by the service team, or re engineered by IT.  Sales also rely on service and engineering to ensure proposals are realistic and on budget.  Teamwork is essential.

But it may never happen.  What if the sales team is incented on gross revenue and the service team is compensated on profit margin?  And then add to the complexity that engineering earns a bonus based on project accuracy and timeliness and that bonus can grow based on overall department profitability.

In team selling, much friction can arise and has the potential to cause a loss in sales and customers, lower customer satisfaction scores and can even effect employee retention and morale.

Before you plan and implement a sales incentive activity you need to gather the department heads involved and hash out all these contingencies.  Look at the metrics across all the functioning teams and make sure your teams are incented to work together.  When all the puzzle pieces fit, you will have less likelihood of program that can fail or do great harm and ultimately be very successful.

For more information on Ultimate Choice Inc.’s products or services contact us at Ultimatechoiceinfo@cox.net

The Most Effective Methods to Control Absences

Employers use a variety of methods to control absences, all with varying results.  Commerce Clearing House does an annual survey of human resource executives on the subject of what method they feel is clients on which method they used and how effective it was for their organization.  The survey used a 5 point scale with 5 being very or most effective.  Following are the results of this survey:

Control Method Used	Effectiveness	Percent Use
Paid Leave Bank	3.5	67%
Vacation Buy Back	3.5	58%
Disciplinary Action	3.4	90%
Bonus (cash or non-cash)	3.3	57%
Verification of Illness	3.2	76%
Yearly review	3.0	79%
No fault	3.0	63%
Personal recognition	2.6	66%

It should be noted that the morale of the organization was also taken into consideration.  Overall, organizations with Good/Very Good morale rated their absence control policies and work-life programs more effective (3.7), than did their counterparts with Poor/Fair morale (2.4).

These methods are almost always used in combination with of other methods. The key for your company would be to choose a program that meets your specific needs

Turn Absenteeism into Presenteeism

Over the years we have seen many studies that estimate unscheduled absences cost a company $2650 - $3600 per employee per year.  Absenteeism in a manufacturing environment can be even more costly.  Safety managers have told us that absenteeism is a big cause in the increased number of incidents of injury or accidents in the workplace.  New and substitute workers just haven’t developed the safety skills that the veteran employees have. 

Absenteeism also carries numerous other indirect costs such as low productivity; disengaged, frustrated  and unhappy employees who come to work and have to carry  the heavier workload of those absent; poor customer service; lower respect for management who put up with the absenteeism; the time it takes to find replacements; the cost of part-time employees and others.

Considering all of the above, doesn’t taking a proactive approach to encourage good attendance make good business sense?  Decreasing absenteeism by even a small percentage can mean significant numbers on the bottom line.  But when companies plan to implement an employee attendance program they often focus on consequences and penalties that are associated with poor attendance.  Exposing these results of poor attendance is important, but there is more value in reinforcing good behaviors than in punishing bad ones. 

You don't want your employees feeling as if they should be paid extra for doing their job.  This is the main reason that many companies would prefer to use an award other than cash.  These programs should also be implemented over a shorter period than long term.  They should never  appear to be an entitlement.  But you do want your people to know that you appreciate and respect their positive attendance. Rewarding for being present can be just as effective for improving absenteeism as penalizing them for noncompliance.  Rewards and recognition for positive employee attendance can make a difference.

Communications is Key

Changing your communication message from Absenteeism to Presenteeism will allow you to focus on all the things that are positively affected by everyone being on the job on time.  If you have any type of employee profit sharing it wouldn’t be very difficult to show the increases in profits that come from dedicated staff always in attendance.  This simple exercise alone has motivated many companies to implement a successful Presenteeism program. 

Having special communication events linked to the program can also add to the fun.  Breakfasts served by the executive staff, luncheons with the CEO for perfect attendance employees in the first month; a special part of the employee newsletter or on company social media can keep the program top of mind. 

Maybe most important, don’t forget a personal heart felt “Thank You” to those who show up on time day in and day out.  Those habits need to be recognized.

How to Screw Up Your Sales Incentive Programs

Here are some of the mistakes that we often see companies make when attempting to design an effective sales incentive program.  These mistakes can turn your program into one that is very ineffective at best or harmful at worst.  Implementing bad incentive programs can be money down the drain.

Creating Conflict Within or Between Departments

Make sure that your rules don’t conflict with the other department procedure or worse with performance improvement programs they may have in place. You will always have some conflict, but you can work to optimize operations so that the conflicts are less likely to occur.  Consider rewarding cross-functional teams as a part of the program

Motivating the Wrong Outcome

The easiest of these to check is getting increased sales without corresponding profit, or leaning too heavily on profit that you decrease wanted sales increases.  Look for a balance in what you want your outcomes to be.

Don’t Have a Top Stop

Unless you have a product availability or service issue or will have undue increased operating costs concurrent with dramatic incremental sales results, don’t put a cap on performance.  Top stops will eventually de-incentivize outstanding performers--or at least limit their overall performance.  You can adjust rules structures for “windfalls” that may occur if necessary.

Protect Current Business While Motivating for New Customers.

Salespeople will be the first to see they can earn incremental commissions by focusing on new customers over current customers.  You can and should adjust rules structures to accommodate for this possibility.  One way is to simply set a “must maintain” type of rule in order to earn for new business, or tie the new business earnings structure to the maintenance of current business. 

Reward Behaviors Your Salespeople Control. 

Move your objectives to the lowest possible level that your salespeople can control.  Nothing will kill a sales incentive program faster than tying it to unreasonable objectives or to corporate objectives out of their control. 

Compete Your Salespeople Against Themselves

It has been standard practice for managers to compete their salespeople against other company salespeople.  Don’t!  You should want them trying to beat the brains out of your external competition.  The most successful incentive programs challenge salespeople to want to excel on their own.

For more information on Ultimate Choice Inc.’s products or services contact us at Ultimatechoiceinfo@cox.net

The Cost of Incivility

Every day you can encounter incivility in the workplace.  Every day you can see rudeness given to an employee, a customer or to yourself.  Every day, customers leave that place of business never to return.  What does that cost? 

Everyone who experiences workplace incivility will respond negatively, in some cases overtly. When an employee feels disrespected they are less likely to work with engaged effort and many just get tired of it and leave.  What is the cost of turnover?

Research tells us that incivility is expensive.  It also tells us that few companies actually recognize it or take action to curtail it. 

We’ve all heard of (or experienced) the “boss from hell.” The stress of ongoing hostility from a manager takes a toll, sometimes a big one, but unchecked rudeness can be surprisingly common.  This is especially the case when the recurring incivility comes from the C-suite. Oftentimes the managers who are uncivil don’t even realize they are that way.  There’s an adage in sports that “you can’t coach speed.”  So to it is very difficult to change a uncivil person’s character type or personality save a threat of job loss.  And unfortunately in that regard there is a tremendous emphasis by companies placed on the cost of litigation as a solution.  Believe it or not, the opposite can occur, the person being offended is at risk of losing their job so the company can avoid the conflict altogether.  No wonder unchecked incivility is so common.

The Costs of Incivility

While all managers must realize that incivility is wrong, many don’t recognize the true costs.  Through a poll of 800 managers and employees in 17 industries, research found in Harvard Business review conducted by Christine Porath and Christine Pearson found that of employees who had faced incivility:

•        48% intentionally decreased their work effort.

•        47% intentionally decreased the time spent at work.

•        38% intentionally decreased the quality of their work.

•        80% lost work time worrying about the incident.

•        63% lost work time avoiding the offender.

•        66% said that their performance declined.

•        78% said that their commitment to the organization declined.

•        12% said that they left their job because of the uncivil treatment.

•        25% admitted to taking their frustration out on customers.

Obviously People are less likely to buy from a company with an employee they perceive as rude, even when the rudeness isn’t directed at them.

At a time when employee engagement is high on ever company’s priority list, it just makes good sense to do all you can to eliminate incivility in your company. An added benefit of incorporating an employee recognition reward effort and put it in the hands of front line management is that it will uncover incivility.  This disrespect is easy to spot when you’re looking for just the opposite.  Every time you reward respect you reduce the tendency toward incivility. And turn this negative into a positive.  When you model good behavior you will influence good behavior.

For more information on Ultimate Choice Inc.’s products or services contact us at Ultimatechoiceinfo@cox.net