What motivates salespeople?
What incentives really drive the outcomes individuals and organisations are looking for?
Do big commissions work?
Dan Pink has popularised research in psychology, and is well known for his work “A Whole New Mind”.
Over the last few years he has researched the impact of rewards in the workplace. Put simply, he argues the case that what we do in terms of reward structures don’t reflect what science has discovered about human behaviour. Rather than helping get better results, large commissions can create an environment where our salespeople simply won’t get the best results for their efforts. Big incentives narrow focus – and for modern sales environments (particularly complex ones), this is exactly what we don’t need.
Have a look at his recent presentation to a TED audience, and then consider how your reward structures may be based on outdated views of what people really want from their work, and what really helps drive outcomes.
The evidence coming in about executive pay and incentives is still the realm of great debate, but two things seem to be emerging:
- The size of executive pay packets doesn’t correlate with organisational performance. Paying big bucks doesn’t in any way guarantee better returns for shareholders, customers or other stakeholders.
- Short term incentives will often result in – not surprisingly – long term destruction of organisational assets. Since people are the main asset of many leading companies, it is critical that decisions at the top of organisations are made to ensure the long term sustainability of the organisation. The last 12 months have seen a number of companies come to regret the layoffs made at the start of the GFC – particularly the experienced salespeople cut from organisations.
These lessons need to be applied to our sales teams to ensure that they are rewarded for building the relationships necessary to ensure long term mutual success – not simply a focus on numbers for the next quarter.
**********
Find out more about Dan Pink and his work here:
Thanks for reading this post – Paul Sparks, Sales Effectiveness Australasia.
“Taking you beyond sales training and keeping you informed about the latest ideas, trends, innovation, research & best practice in professional selling and sales management”
{ 0 comments }
