Dis-incentive programs and how to avoid getting one

A poorly designed incentive program can be unmotivating at the least and produce little, or in the worst case, a costly program that is difficult to exit.

We have seen them all and have some tips on what not to do and a downloadable process on how to design an effective and relevant-to-your business program.

Don’ts for incentive program design

1. Don’t pick up another business’s incentive program and apply it to your business.
2. Don’t run the same incentive year after year without reviewing your business strategy, capacity and objectives. For example, you may be in a phase where client retention is more profitable, so increasing the value of each client is the objective and there is less emphasis and target allocated to client acquisition.
3. Don’t make up or rough out the numbers. Model out the scenarios and calculate the cost and return to the business and value to the revenue producers. You will also likely identify administration issues or audit requirements.
4. Don’t build an incentive where external influences can contribute to the target’s achievement. For example, exchange rates improve and push up the value of the sales. Rises in the share market contribute to growth of funds under management and increase commissions received as revenue. Make sure it rewards the actual efforts and activity of the revenue producer.
5. Don’t forget that an incentive is part of a remuneration package and you need to account for any base salary in your calculations and identify what that rewards.
6. Don’t not set a base sales performance target. You need to be able to manage under performance in your business. Just covering a producer’s base salary in sales or achieving last years result is not necessarily going to get the business to where it wants to go and is consuming your valuable resources.

Now that you know what not to do, click here to get the good stuff on designing an effective program.

Book an initial meeting. The coffee is on us!
Call 0413 670 417
Email support@whiteroomgroup.com.au
Visit www.whiteroomgroup.com.au