Motivation In Tough Times…

Ann Bares who writes on Compensation Force threw down a gauntlet of sorts last week.

She posted about what to do with compensation structures during a downturn in business.  Her post referenced this post by Colletti-Fiss Management Consultants.  I made a comment on her post about using non-cash as a safety net and included a couple of thoughts about non-sales goals.  She mentioned that it might be a good post on this blog.   Serendipity struck and within a  hour or so of that post I got a RSS feed from The Happy Burro blog talking about the very same thing.

Not one to turn down a challenge – or a good idea – or take advantage of a swelling tide – here are some thoughts about what a company can consider when faced with tough economic times.

The focus is on sales people since they are one of the larger employee groups that have a variable compensation component and will be affected to a greater degree than most.

The article by Colletti-Fiss does a good job of highlighting some important responses:

• Validate the goals against the new business projections
• Look for ways to get the sales people in the game faster with a "fast start" bonus
• Keep sales people in the game during the year by resetting goals or including "SPIFFS" or short-term, ad hoc incentives

The Happy Burro adds a few other ideas:

• Focus on what is working.  Are overall customer
  satisfaction scores down, but are up in the east region?  Celebrate that
  fact, then figure out what is different about east region and try to
  work on the scores in other regions.
• Reward people that are reaching their goals
• Give extra attention and support to the employees that are struggling to meet their commitments
• Be a realist with company news – if the budget needs to be cut 15% do not play down the impact
• Routinely discuss what might be, not just the doom and gloom
• Thank people for extra effort and let them know you value each and every contribution

I’m happy to see that the suggestions from the elated donkey included a lot of communication and recognition.  Both of these go a long way to creating a positive work environment when things are tough.

Take A Different View

If the business environment is tough and even when sales people are doing the things necessary to make sales – but the customer isn’t buying (or can’t buy due to their business environment) it doesn’t make sense to just increase the incentive.  Just like putting more wood on too small a fire, you can actually put it completely out. 

Adding additional bonuses for hitting goals (that may be out of whack now) or changing goals in mid-stream (that may become the default for next year’s goal setting) will ultimately hurt the organization.

But… you can add new goals to the mix that will allow you to drive business for the future.  The reward for those goals should be non-cash based in order to maintain a distance from your compensation structure and allow a company to remove them after the downturn – with no affect on compensation levels.

Some of the goals to consider including in an incentive during slow times could include:

• Meetings with clients to discuss their business to see if there are ways to reduce costs vs. sell more stuff.  Give points for each meeting and for documenting new ideas.
• Meetings with clients that are "non-traditional" users – brainstorm about this and set up some targets for "meetings" not sales.  This will be more of a learning exercise not a sales call.  The goal is to get the sales person outside their normal comfort zone and see if there is a market where they never thought there was one.  Award for the meeting and for sharing the information.
• Administrative activities – updating databases, expense reports, etc.  Anything that sales people don’t typically do – get them to do it now.  Spending time on these activities won’t impact sales too much if the market is down for a bit .
• Conduct additional training – with incentives for participation.

The natural reaction is to crack the whip.  Take a minute and really look at the situation.  It may not be an issue of sales effort.  Increasing the pressure during a slump may just be just the thing some of your top performers need to convince them to leave. 

Use the time to reassess, reorient, adjust.  I wouldn’t completely change anything including compensation until I was sure that this wasn’t just a momentary set back versus a wholesale change in the market.