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Incentives Question

  1. Mar 20, 2015 #1
    Quick question guys. Is there a required incentive program for a company? For a field sales team, should there be a group incentive or an individual incentive? Please, any input will help. Thank you in advance!
  2. jcsd
  3. Mar 20, 2015 #2


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    Staff: Mentor

    In the US I know of no mandatory sales incentives, or commissions. It's up to the individual company, and then even departments and small groups within departments.

    I have no idea what your question really is, can you be specific, please. Thanks!
  4. Mar 20, 2015 #3


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    Gold Member

    Why would such a thing be "required" ?

    Probably one or the other but it can depend on a lot of factors and can in some circumstances be replaced by other motivations.
  5. Mar 23, 2015 #4
    Only a small percentage of companies have incentives, but I think employee incentives are mutually beneficial. The employee will feel valued and motivated and will be more productive and committed. We all know that the company will reap the benefits of a motivated employee,the company’s bottom line increases as the employee’s productivity peaks.
  6. Mar 23, 2015 #5
    Hi Evo. Thank you for your reply. Our family has a paper business and we have 5 sales persons. I am thinking of an incentive program for them and I am wondering if there is like a prescribed / rule about giving incentives - like minimum percentage? But, as flinkpopper said, only few companies would give out incentives, so I guess there is none. I used to work for bosley - the hair company and you can imagine how competitive they are and the type of incentives they give - and I was wondering if there is a formula I was supposed to follow.

    I guess, the question now really is whether to give a group incentive or an individual incentive. :(
  7. Mar 25, 2015 #6
    If it is five sales reps..... and I am just spitballing from personal experience, a surprisingly cost effective hybrid is often the magic.

    Unless it is an integral and meaningful part of the overall compensation package, a direct financial spiff can be less than effective, in either cost or effect. You might want to implement a sliding commission scale, perhaps for reps who hit certain breakpoints, but that is really more an issue of compensation than incentive.

    As far as providing what and to whom, awarding something small but noticeable to the group if they hit certain (challenging but attainable) aggregate performance targets, as measured by total group sales, is a great way to spur on your team. Any given individual may be sanguine with their own set commission targets, but this adds a bit of peer pressure to the situation and a friendly reason for them all to perform.

    As far as the individual incentives go, for commissioned reps that can be a very cost effective force multiplier, but there are many traps. As noted, additional financial spiffs should be part of the compensation package up front. Nothing wrong with paying bonuses or greater spreads to high performing reps. That is a big part of how you keep hold of them. Every rep gets their own compensation deal. All negotiated individually and privately.... never talk about any one's deal to anyone else. That is just plain bad politics.

    As for individual incentives, I am a great believer in less is more. Offer something specific and tangible to the top rep or two each given month. Maybe they get expanded use of the company car, or an extra day or so off, or a fancy fishing rod (assuming all your reps like to fish), or something that is cool, thoughtful, will _meaningfully_ affect their lives for that month! This last thing is the most important. It must make proximate quality of life more positive, clearly and demonstrably, even if only in a small way. Maybe for that month, the top rep gets latte service to his desk. Nothing that would hurt or piss off the other reps, and nothing that is clearly a fundamental promotion of status. With a little thought and effort, this can be one of the most highly leveraged, and cost effective sales force multipliers in your management arsenal. Low cost things, on a monthly basis, that show recognition of achievement, make a recurring improvement in proximate quality of life can bring all new energy to a sales team. You do need to keep changing the actual award... every month if possible. Keep it creative and fresh. If it gets to regular and boring, it ceases to be an incentive.

    Thus ends my management ramble for this month, at least......

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