9)      Too many SPIFFs. Creatively designed by brand managers in their quest for gaining attention share from salespeople, they may end up expensively undermining the whole incentive system (and company performance too). I have to admit that some of them, especially if well thought, can give a spike on sometimes monotonous salesperson life. However, if too many, sales people will pick one that is the most convenient for each (actually will look like a well agreed split) and the overall result may be less than we hoped for. Consequently, we end up spending a lot for a performance that on average is the same.

10)     “Sky is the limit!” No cap for rewards. The more you sell the more you get. May also work in some situations pretty well. Unfortunately, in carries also the message that “sky is the only limit!” and this can trigger some undesired (you can also read unethical) behaviors. Think about it! Especially if within pharmaceutical industry.

11)     “You’re new, we’re only watching you! No bonus for 3-6 months.” First of all many of the salespeople joining companies are coming from companies where they received bonuses (unless we’re keen to collect a bunch of crap)! Secondly, it may be true that it can be difficult to grow sales anyway at the beginning for many of the salespeople, but the first months offer the greatest opportunity to model the person you want to have in the company and a positive reaction to it may be something you may want to reward! Or not…

12)     “Time can be money”. That means people want to feel the money more often to move their butts. Dogs in circus get a small piece sugar after each number and not a kilo at the end of the show. I happened to know a company that would only pay half of the deserved bonus quarterly, the other half would be stored in some “virtual bank” that could be cashed only once a year (if the employee was still in the company). And the virtual bank paid no interest!!! Quite cheap! No sales person liked it and after all why would you set a system not to be liked!

This may not tell anyone how the most appropriate system would look like for his business! Nevertheless, I hope would offer some reflection on what the actual bonus plan does and/or hopefully would prevent making some expensive mistakes in the future. Please feel free to comment and bring in some of your own experience.

Filed under: Field Force Managers, Sales Force Effectiveness by admin