Feature Article - November/December 2013

Give Sales a Boost

Using Incentives to Reverse Disengagement

By Brian Summerfield

Brad Nix, an entrepreneur based in the Atlanta area with more than 15 years of sales experience, is skeptical of the power incentives and rewards have to positively affect a disengaged sales force. He believes that a disconcerted, underperforming team is the result of aimless leadership or poorly defined goals. His advice to anyone who finds disengagement in their sales group is simple: "Stop trying to externally motivate and work on the strategy."

He has a point: The first thing you should understand when it comes to using rewards and incentives programs to engage your sales staff is that this approach is limited in what it can achieve. This is not to say that such programs aren't valuable and effective, but merely to reiterate that they aren't a panacea, either.

Erroin Martin, who has worked on sales teams as an associate and a manager in industries such as pharmaceuticals, finance and software, agrees that poor strategy and goal setting leads to disengagement. That often causes tension between the sales force and management, he added.

"One of the prime reasons teams get disengaged is that goals are unrealistic," Martin explained. "They feel like things are stacked against them—that they can't win. From a manager's perspective, they need to get their sales figures. And many managers who are reactionary will crack the whip."

Ian Larkin is a professor at Harvard University's School of Business who also consulted on sales compensation issues with McKinsey & Co. for four years. He's studied extensively the connection between motivation and incentives in sales environments. He says disengagement typically comes from softer issues than compensation.

"Demotivation is oftentimes linked to culture, failure to recognize people, poor links to other parts of the organization—those kinds of things," he explained.

Larkin's advice regarding demotivation is to avoid it in the first place. He acknowledged that answer is a bit too easy (and unsatisfactory for someone who inherited a bad situation), but his larger point is that the things that cause disengagement are typically serious problems that go well beyond whether sales associates are feeling happy and fulfilled about their work.

Rewards and incentives are a pick-me-up, like coffee. They're good for providing a boost of extra energy and creating urgency around a particular goal. Purpose, mission and goals are like bacon and eggs. They nourish and sustain your sales staff—and your organization—over the long haul. Both are important for good performance, but without the latter, a sales team can't function properly to begin with. So, before you start to consider whether or not rewards and incentives will improve your team's engagement, it's important to make sure you've taken care of the fundamentals.