Incentives exist to reward (reinforce) a new or improved
behaviour in order to encourage people to do it for the first
time, and then repeat it until it becomes part of learned,
ordinary behaviour.
Because there is absolutely no point in having
an incentive at all, unless it is targeted at a
specific change in behaviour which will result
in increased value for the organisation above
that which is expected in return for the salary
and benefits package already being paid or
distributor/broker pricing offered.
And the reward must be
delivered as soon as possible after the behaviour in order to be
properly associated with it in the mind of the person for whom
it's intended. Because if it isn't, your incentive will end up
simply paying for the performance you would have achieved
anyway. - Or, you won't reward anyone at all, resulting in a
de-motivated target group. (The absolute opposite of your
intention).
Any incentive which is based on
a quarterly or worse view of an overcomplicated matrix of
objectives, cannot hope to have a real impact on the day-to-day
behaviour of real human beings as they interact within an
'immediate' daily bombardment of requirements, constraints and
reactions.
However, care is required!
This point being nicely illustrated by the story of an
automotive salesperson in a high volume used car ‘supermarket’
whose end sales figures (and personal income!) were fantastic.
Unfortunately, all he did in
reality was to ask everyone he saw as he moved quickly around
the dealership "ready to buy yet?" He picked up all the
opportunities to 'take orders' but risked losing the
organisation more business than he won through appearing rude
and unhelpful to those people who were looking for advice and
assistance.
According to Aberdeen Group, in
their research, one of the main causes of failure in performance
based pay plans has been the inability of organisations to
articulate quantifiable measures of behaviour.
I believe it goes deeper than this. Not only do they fail to
put their measurable requirements into words for their people,
but they also fail to ensure that those requirements take
quality as well as quantity into account.
