Avoiding common incentive mistakes.

Louise Anderson is the president of Anderson Performance Improvement, a sales consultancy based in Hastings, Minn. Here, she talks with ABA BJ about what incentive strategies lead to a more successful sales effort, how to promote a cooperative corporate environment, and the role technology plays

What are common mistakes that companies make regarding incentives?

Companies don't identify and then reward specific behaviors that have been proven valuable to the organization and led to sales. They only reward the desired outcome.

Can you give an example?

Instead of rewarding "active listening" or how often a given sales executive meets with or checks in with a client--which are some best practices correlated with sales growth--you only reward performers that reach a certain sales target.

Or, to give an example related to claims processing, a company might routinely reward say, bad debt collection, instead of rewarding units that avoid bad debt in the first place.

Ideally, what management should do is evaluate their best practices and promote them throughout the organization so that the average performers can learn by example. My belief is that most people want to do a good, if not outstanding, job and are willing to consider a new approach. But they need insight into what is expected in specific terms.

Why do companies have trouble identifying successful behaviors?

Some of the problem may be that the behaviors seem "soft," or difficult to measure. Or, the organization may have no idea what behaviors work for their most successful team members and feel that they simply couldn't ask.

Sometimes it's a matter of identifying particular obstacles and promoting "counter measures" so that a company improves the business process and ultimately reaches its sales objectives. So, for instance, if referrals aren't being handled properly within the organization, that business problem might be something to address before you consider rolling out an incentive program.

Often, identifying the right behaviors to reward just comes down to keeping an open mind, asking questions, and having a willingness to change what is clearly counterproductive in process or personnel management.

Most sales people seem fairly territorial. How does a company encourage collaboration?

Some are "territorial," as you put it. Yet I think senior management can promote a culture of sharing and the distillation of best practices that are adopted by everyone.

Also, if you reward top performers for helping the other members of their team, they will tend to share more openly. And, over time if everyone feels like they have something to gain from a group-centered approach it can promote better cooperation.

What role does technology play in reinforcing the kinds of behaviors that are identified as effective?

Certainly, it can make an abstract sense of progress tangible. You can literally see the contest unfolding. I can't tell you enough how helpful it is for a sales team to be able to log into an application that shows them how many points they've earned or how, basically, their performance is being assessed and is gradually being converted into a reward--much the way consumers might earn points by air travel. It makes the experience more real for employees. It gets them to pay attention.

Tell me more about how the application works.

The back-office component keeps all the incentive information in one place. It allows clients to deploy an enterprise-wide reward and recognition system that can track rewards back to a specific cost center and provide reports. All of this can be done without involving a client's IT department. From the front-office perspective, participants can log in and see how they are doing on the web. As HR continues to move toward greater fiscal accountability, it is important to have a partner that can provide reports and help everyone keep track of how closely they are meeting objectives.

How did you develop it or which vendor did you work with to develop it?

We developed it in house.

How important is training--and coaching--in developing a strong sales department?

It's critical. The most successful organizations put in 50 or 60 training hours per person annually. But you're right to separate the two initiatives. Training involves the initial performance-shaping effort. Coaching is usually more individual in nature and it's periodic. Since not everyone is a "natural," coaching can make a huge difference in the results achieved by an average performer.

One of the most successful sales executives I worked with sat down with his new salesmen and critiqued their conversational style. He'd even interrupt a call, have them put the client on hold, and tell the sales associate what to do differently.

Some of his employees didn't appreciate the one-on-one attention, but this manager knew that the teams he worked with directly outperformed other teams.

How long are your client engagements?

They're generally fairly long term--a year or more. One common misconception about incentive programs is that they can be "short and sweet." However, the best behavioral reinforcement works over time.