Do Bonus Schemes and Commission Payments Act As Sales Incentives?

It is generally thought that sales people only work flat out if they can anticipate good bonuses and commission payments. Currently, however, many psychologists take the reverse viewpoint: incentives are not as attractive as their proponents uphold. Quite the opposite: psychologically, incorrect incentive systems are more likely to be detrimental. Sales force impetus is pivotal to sales success and is a core subject on any good management course.

Recent psychological investigations yielded the following results:

1. Incentives induce a willingness in salespeople to work harder for a short time. But if incentives are all about encouraging permanent changes in the salespeoples' attitudes, they are just as ineffective as sanctions.

It is not the material incentives, which bring about a change in the basic attitude, which determines the behavioural patterns of sales people.

Material incentives do not bring about any permanent commitment either. Salespeople expecting to be rewarded with a bonus for successfully concluding a task do not work as well as those salespeople not counting on a financial reward. Just because too little pay can have a demotivating effect, it is not right to conclude from this that more pay induces more job satisfaction or has a greater motivational effect. This specific area is covered on any good management course.

2. Incentives are extremely attractive to the field sales department, but because they are connected with certain types of behaviour, salespeople feel manipulated by their sales managers. The feeling of being controlled is increasingly felt as a sanction by salespeople.

Furthermore: if a salesperson is expecting a bonus and does not get it, this amounts to the same as if they were penalised. The more attractive the bonus, the more demotivating it is when the salesperson does not receive it.

3. If salespeople are forced to compete with each other for bonuses, recognition or status, this can obstruct co-operation and thereby good performances. For every winner, there are countless others who consider that they are losers.

4. Disappointingly, sales managers often use incentives as a replacement for what sales people actually need, specifically, equality, advice, social support and room to manoeuvre.

This is all part of good management. It is, of course, easier to wave a bonus in front of your salespeoples' eyes and hope for good results.

5. When salespeople are prompted into thinking about what they get when they work hard on something, they feel less like taking risks, plumbing new ideas, or following their initiative.

Sales people working towards a monetary reward, which is exclusively dependent on their performance or anticipated performance, only think in terms of figures.

There is a message in the reward for a certain performance: The sender (of the message) is telling us that we have concluded something and in so doing controls our potential conduct. The more the salesperson feels controlled from outside, the more they will lose interest in what they are doing.

6. The larger the material incentive offered to the salesperson, the more negative their attitude will be towards the activity they have to perform in order to receive the material incentive.

No matter what the reason for this effect may be, every material inducement or every success-related bonus format tends to remove a salesperson's enthusiasm in what they are doing.

You may be thinking: "What is all this? If you don't offer salespeople an incentive, they will not do anything!" Psychologists call concepts like this a self-fulfilling prophecy! Promising a salesperson a reward for appearing motivated in their work is a little like offering salt water to someone who is thirsty. Consequently, so that your sales force continue with a high level of enthusiasm provide individuals with equality, advice, support and empowerment. To develop your managerial motivational skills attend a good management course.