Think beyond the money: Your people do

 

In these tough times, you may be tempted to tweek your compensation plan as an incentive to drive higher performance. But is this the most effective method? If your sales reps can earn more commission by working harder, why aren’t they doing it already? Your compensation plan merely establishes the minimum benefit an employee can expect for meeting basic standards. Increased compensation, by itself, does little to drive improved performance.

Top performers don’t reach that level solely for the money. They’re in it for what the money gives them – recognition, security, luxury, status – which are psychological and emotional rewards. Many others are just trying to make enough to meet their personal budget and perhaps have a little left over. These people in the “Great Middle” have the most potential for improvement because there are so many ways they could work harder and smarter and so many untapped opportunities in front of them.

When you need exceptional results from your people, you need to offer exceptional rewards. Several studies and decades of experience have shown conclusively that, dollar for dollar, non-cash performance improvement programs produce far better results than cash. They do this by rewarding improvement with praise, recognition, merchandise and travel awards.

Non-cash awards are more cost-effective than money. Adding a few percentage points to your commission structure won’t generate a great deal of money for most people. But that’s a sizeable chunk of your gross profit. Non-cash incentive programs regularly drive significant improvement from top performers and other employees at a much lower overall cost, typically less than one percent of sales.

Non-cash awards generate sustained performance improvement. A cash bonus commonly disappears into the family budget. A wide-screen TV, a new bike for a child or a luxurious travel experience will be a lasting symbol of achievement, continually reinforcing both the extra effort required to earn it and your acknowledgement of that effort.

Non-cash incentives are more flexible. They don’t become confused with standard compensation, so you are free to adjust or discontinue them as needed without the danger of people feeling you’ve taken something away. Because non-cash incentives are not subject to the “equal pay” limitations affecting compensation plans, you can set individual goals, based on individual potentials, and offer rewards based on individual achievement. And non-cash awards are equally effective with all types of audiences including salespeople, production staff, telemarketing operations, distributors, dealers, agents and customers.

Find out how non-cash incentive programs can work for you. Performance improvement suppliers can show you how to create and sustain focus on specific behaviors (training, demonstrations, product introductions, error reduction, safe work habits, teamwork, etc.) and revenue and/or expense improvements. Learn how to generate excitement, focus attention on critical behaviors, sustain and renew energy, and drive results with an exceptional return on your investment.

Before you throw money at your performance challenges, remember this: Money is what we work for. Recognition, luxury and status are what we’ll work even harder for. Look into non-cash incentives for all of your “people performance” challenges. You’ll be surprised to see how much more your investment will do for them…and for you. 

When you need exceptional results from your people, you need to offer exceptional rewards. 

BIO:

Written by Motivation Excellence Inc. and submitted to The Performance Improvement Council (PIC), a professional organization of performance marketing executives, is collectively focused on helping companies optimize their investments in human capital through proven and innovative reward and recognition solutions.