South-Western - Management  
A Lesson in Perversity: Giving Salespeople the Opportunity to Choose Their Incentives Can Reap Rewards
Topic Incentives
Key Words Incentives, sales competition
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News Story

The sales field has been primarily an individual endeavor. Cash incentives and sales contests have been a mainstay to see who can be the top sales person in a company. However, some companies are requiring their sales people to collaborate to reach sales goals. This can produce confusion and, if not handled properly, can discourage the sales force.

One sales manager posted a menu of competition/collaboration incentive ideas on the company's intranet. He asked the reps to choose the one incentive they thought would work the best. All of them wanted the winner-takes-all competition. Collaboration was nice but not needed.

Senior management had different ideas. They wanted their reps to be resources to each other. However, the sales manager saw the results of the survey and came up with an incentive of his own: He declared that "none of his reps could place in the top three of the sales contests unless they also placed in the top six of the sales-collaboration contests." He promised a weekend at a luxury hotel to the one who placed in the top three in both categories. The reps could choose which contest they wished to enter.

Giving sales people the opportunity to define their own incentives is good management that gets results.

Questions
1.

In the article, the sales force was very clear that they wanted the individual sales contests as a sales incentive. Why do you think that senior management wanted the reps to collaborate with each other? What are the advantages and disadvantages of sales collaboration?

Source "A Lesson in Perversity: Giving Salespeople the Opportunity to Choose Their Incentives Can Reap Rewards," Sales & Marketing Management, Jan 2004.
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