The 12 Challenges To Designing Incentive Plans

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These slides were presented at the Pharmaceutical Sales Managers Group in the UK in July 2009. Please contact neil@earthware.co.uk for more information.

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  • The 12 Challenges To Designing Incentive Plans

    1. 1. The 12 challenges to designing a successful incentive scheme Neil Osmond [email_address]
    2. 2. There are three reasons to operate a sales incentive plan … .. and two of them aren’t popular! 1. To align your payroll costs with your company/brand performance 2. To take money from poor performers and make it easier for them to leave … . and give it to high performers to make it harder for them to leave 3. To clearly communicate what success looks like and persuade salespeople to work harder to achieve it!
    3. 3. Every Sales Manager can create a superb incentive plan on the back of a fag packet – avoid these at all costs!
    4. 4. Don’t pay twice! – base pay is for doing your job, incentive pay should only be for exceeding reasonable expectations!
    5. 5. Be careful what you wish for – you might just get it! People do what they are measured on!
    6. 6. You can have SIMPLE … or you can have FAIR … but you CAN’T HAVE BOTH! SIMPLE FAIR
    7. 7. A fair target …. it simply doesn’t exist!
    8. 8. But when it comes down to it – it’s all about the people!
    9. 9. Very few people in (professional) life come to work to do a BAD job!
    10. 10. Remember the 10:80:10 rule!
    11. 11. Incentive plans don’t manage people … MANAGERS MANAGE PEOPLE!
    12. 12. The incentive plan is just one tool in a Manager’s toolbox … Great Managers know the best tool for each team member at the right moment to help them achieve the best results! Base Pay Bonus Pay Possibility of Promotion Development Opportunities Greater Responsibilities Time with family Verbal public recognition A letter, a note, an email A Friday phonecall A team event/meal A simple “ Thank you” A conversation with your Manager and many more …
    13. 13. It’s not enough that I win … the other guy has to be seen to lose!
    14. 14. We have all seen good schemes fail as no one explained it Decide on a scheme and then communicate the crap out of it!
    15. 15. The 12 challenges and any questions? 1. There are 3 reasons for an incentive plan and 2 aren’t popular 2. Avoid back of the fag packet schemes 3. Don’t pay twice for the same performance 4. People do what they are measured on 5. You can have simple or fair but not both 7. Very few people come to work to do a bad job 8. Remember the 10:80:10 rule 9. Incentive plans don’t manage people MANAGERS MANAGE PEOPLE! 10. It’s just one tool in the Manager’s toolbox 11. It’s not enough that I win … the other guy has to be seen to lose! 12. Decide on a scheme and then communicate the crap out of it 6. A truly fair target simply doesn’t exist

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