True or false? “Sales reps are coin-operated!”
The answer is = True - when you’re doing it wrong.
If you are depending on variable compensation to drive sales motivation, yes, you’re doing it wrong.
Motivation is an incredibly complex topic. I've been nerding out on a lot of the research lately, and realizing that traditional sales leadership theories on the role of variable compensation need to be reconsidered. But, the simplest one to tackle is developing the right mindset of compensation & rewards' role.
To start, why are you still reading this article? I’m guessing nobody is paying you to do it. There’s no quiz at the end.
Right now you are likely intrinsically motivated - reading because you possibly have an interest in the topic, and would like to know more.
The opposite is considered for a job that requires little complexity of thought or creativity.
George: “Hey, go dig some holes!”
You: “That sounds awful. No thanks!”
George: “I’ll pay you $50 per hole.”
You: “Where’s the shovel?”
In this instance, you had to be extrinsically motivated - necessary when we don’t find intrinsic motivation from doing the job.
In a selling capacity, where optimal performance requires interest, creativity and complexity of thought, extrinsic motivations fall down. As a matter of fact, extrinsic rewards can decrease motivation for a task that you are intrinsically motivated to do - something psychologists refer to as the "overjustification effect".
Variable compensation's role in a healthy selling organization is that of a positive, secondary reinforcement.
Positive = it's a reward. As opposed to negative, which would be a punishment.
Secondary = A reinforcement - a stimulus paired against a desired result.
In what may sound like a statement made by Captain Obvious, engaged employees consistently outperform, have longer tenures and are more likely to assist in recruiting than disengaged employees.
The key to having reps who show up every day, do their best, stay and tell their friends is in creating an environment where they are rewarded for doing work they are intrinsically motivated to do.
I am still digging in deeper to the topic, so if you aren't already subscribed, it's easy to do below. For example:
- I'm digging into the research around the impact of large rewards on performance. In other words, initial research is showing that when a large reward is at stake (i.e., you're working on a huge opportunity with a huge commission check waiting at the end of the rainbow), performance goes down. The potential prize clouds our innate ability to maintain creativity in complex situations!
- And, I teach a sales leadership workshop on Maximizing Sales Engagement, the checklist and categories of feelings that, when optimized, result in reps who show up every day, outperform the average, stay and tell their friends. I'll also be writing a lot more on the topic...
What do you think? Comment below, or share with your thoughts.