The Incentive Dilemma:

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Incentive Dilemma:

By: Paul Shearstone

Manufacturers and distributors are rolling out more sales incentive programs for their channel partners than ever before.

Some of these programs are not as successful as they could be, however, because they fail to appreciate fully what motivates salespeople and drives them to overachieve. Read on to learn six key concepts that can make your incentive programs more effective.

The dangling of the proverbial carrot is an ancient art that is commonly understood to be at the heart of human behavior, psychology, motivation, and, in particular, business. Manufacturers and distributors commonly use this technique with their channel partners in an effort to add unique motivational value to move specific products or services. The reason this technique has stood the test of time is because, for the most part, it works! At times, however, elements of the technique are executed improperly. Sales incentive programs under perform or fail as a result.

The monetary values of incentives are often not the critical factor in motivating sales people to succeed. Take my own example. I was fortunate to work in an industry that provided an unending supply of incentives and awards for overachievement. I knew that, if I won every trip, every TV, every incentive offered, the money would come with it! For me, the money and the goodies were not my primary motivation. My philosophy was simple; "If you win all the incentives there are to win, you couldn't help but be at or near the top every time." Corporations use incentive programs to drive behavior and I agreed to play the game and conform to their wishes; what gets rewarded, gets done.

The problem, from the vendors' point of view, is that not all salespeople are motivated the same way. Consequently, not all incentive programs work. Why is that? From my experience, I'll make the following observations:

1) The 80-20 Rule: Twenty percent of the salespeople make eighty percent of the sales and profits. Too often, sales incentives - perhaps in an effort to be fair - are geared to the entire sales force or VAR channel. The risk in a program like this is that the glove that fits everyone, in the end, fits no one. Enlightened marketing strategists know that the top twenty percent are already motivated. Simply put, a strategy that's geared to light a fire under the next twenty percent - the next logical group - doubles the business in a more cost efficient manner.

2) The KISS Theory: Salespeople by nature are like electricity. They naturally take the path of least resistance. That's not to say they are lazy or untoward. In fact, it's just the opposite. Good salespeople look to simplicity to make things happen.

Often, incentive programs fail miserably because of innate complexities either in their recording and reporting systems or in how rewards are won. If you put the salesperson in a position where they are forced to assess "To get this, I first have to sell this, plus these and not these and they must include these," you are creating a recipe for confusion, sales frustration and failure. In the end, the incentive program becomes a disincentive!

The remedy? Manufacturers must keep the program sweet and simple and attainable. There can be no ambiguity. Anything less will result in a lack of interest, as well as a waste of time and money that can sometimes spill over into other departments whose task it is to administer and account.

3) Education: Edison may have invented the light bulb, but it never went anywhere until a salesman understood its benefits and made the first sale... and probably sold a lamp to go with it!

Incentive programs don't just sell themselves. Too often, expensive motivational programs are overlooked in the field because reps either don't understand their value and/or are unsure how to sell them. Many times, good programs are written off as having missed the target, when in reality, they just weren't rolled out and managed properly.

4) Competition: Everyone's heard the expression, "Timing is Everything!" This is particularly important sage advice for the successful incentive program planner. Marketing execs can't know when every competitive incentive program will rear its aggressive head, but they can take strides to ensure their program is given first look.

Any successful salesperson will tell you, "Most sales are made as a result of due diligence on the front end." Simply put, the better the preparation, the more likely the sale. The same can be said for incentive initiatives. Real incentive programs, like new movie releases, are something to be anticipated. The right amount of promotion ensures greater acceptance and interest that often usurps focus on competing programs.

5) Reward: Any reward-value can become an unmotivated anticlimactic activity if the time span between winning and getting, is too long. Successful incentive programs reward immediately! As a rule, the faster the reward is delivered, the greater the enthusiasm for the program.

Although on some levels, salespeople are a complex breed, when it comes to incentives, they are - for the most part - quite predictable. Their nature is to react to excitement or challenge faster then most, and then move on. One way to maximize their natural bent and ensure greater program success is simply to cater to their natural motivators. "Get them their stuff QUICKLY!"

6) Recognition: At the risk of making salespeople appear shallow or monolithic (they are not), recognition amongst their peers is still the quintessential motivator, whether there's an incentive program or not.

The rule again, is, there is no such thing as TOO much recognition! Salespeople by nature gravitate to the limelight much like other performers, and so there should be no shortage of achievement and overachievement recognitions that find their way - in a timely manner - to the public's eye.

Psychological studies have shown that the pursuit of recognition, in and of itself, can make the difference in targeting that critical second twenty percent on the sales achievement ladder. Experts agree that successful sales teams find motivation in their own champions. Beatifying the sales leaders instills excitement and a definable hierarchy that beckons all players to become a part.

Another fact that is frequently overlooked is that recognition, whether part of an incentive or not, is the least expensive means of motivation. In many cases, it's free! Often, shaking the hand of the president in front of the company is all it takes to galvanize the need to overachieve.

The Bottom Line: Manufacturers and Distributors must take greater care when designing motivational incentive programs. Take a page out of the "Sales 101" book that says, "Find out what they want, then, give it to them!" But make sure to keep it simple, keep it clear, promote it properly, reward immediately, don't try to target everybody, and, recognize, recognize... RECOGNIZE!

About The Author

Paul Shearstone aka The 'Pragmatic Persuasionist' is one of North America's foremost experts on Sales and Persuasion. An International Keynote Speaker, Author, Writer, Motivation, Corporate Ethics, / Time & Stress Management Specialist, Paul enlightens and challenges audiences as he informs, motivates and entertains. To comment on this article or to book the Pragmatic Persuasionist for your next successful event we invite to contact Paul Shearstone directly @ 416-728-5556 or 1-866-855-4590 or


OhLilOne 19.05.2007. 07:27

What happens if you get rejected from all the nursing programs you applied to? Im basically done with my prerequisites for nursing but now I have to apply this Fall. What should i do if I don't get in to any nursing programs? Money and time is a definite factor here. Here's where my dilemma;
-I'll be transferring to a 4 year college as a Health Science major but i'm a little hesitant to even go to school for that. It's not the major i want to pursue at a 4 year but it's my back up it i dont. It was biology, although, i dont have most of the prerequisites done, meaning i'll be at the cc for another 2 years or so...
- Or should I go to school for LVN for another 1.5-2 more years
-or go into medical assisting (6month program) and wait until i get into a nursing?
Overall, i want to work directly with patients. Not be a health administer. I'd drop everything once i get into a nursing just scared to waste lots of money and time.
Ayyyyyyy.....God is punishing me... Please help me!


Admin 19.05.2007. 07:27

Get an associate degree. You only need the four year if you want to supervise and push paper. Most hospitals provide incentive programs to fast track a degree to Bachelor. Bonuses and pay are involved and if you are in no hurry you still make great money with the associates degree. Sign on bonuses and what not. Hope this helps. :-) Also my sister's a nurse with the associates and they are always begging her to fast track the rest....


Jess W 09.10.2009. 00:00

Given the opportunity, should we be expected to exploit the free rider dilemma, or abstain from its benefit? If people ignore the free-rider problem in building an institution, should those within the institution exploit it to invoke revision and increase their individual utility, or should they attempt to ignore its implied incentives and forgo refinements to an imperfect institution?

Jess W

Admin 09.10.2009. 00:00

We this is the problem if you take all the women and children out of hud housing and stop food stamps people will starve millions of poor whites ,hispanics,blacks resort to stealing crime will be at a all time hell .Home invasions ,murder ,rap,and terrorism would increase to extremly hihg levels .Since this countires main focus is on materialism as the source of all relationships,stability and good health people may be less relectant to just steal but to kill out of anger .

We currently have the largest incarceration rate in hte world .We have a housing market that is eating away at teh savings of Americans some speand 70 percent of ther income to pay there mortagage
We have a medical system that caters to those that can afford to pay 800 a month or more for health insurance these are beyond fairy tales for me.

After getting hut by an 18 wheeler at 70 mph I needed a handout AIG offered my 6,000 for lalmost 4 years of unemployment and hell.If it wasnt for the goverment I wouldnt be just sleeping on the street I would be resorting to the same things I did before and doing alot worser things.Its not that I am bad its just the fact that I am accustomed to more you can take the richest women and I can assure you if she is put to the lowest depths of poverty she will submit to the eviliest acts .There are married women on the streets working to pay for a night at a motel .

We dont need capitalist that want to work people for pennies on the dollar we need carrers ,jobs and housing that people can work for and afford .For me a life of prison or lethal injection is better than being exploited I pity u people that are slaving for years and dont earn not even 8 dollars an hour .Its unAmerican to be abused like that.

Every place I have worked at I have always been made to do the job of a few people I normally excel quickly but I find that my pay is nothing .I can not even go out and do nothing it makes no sense to suffer it seems ridiculous to trust in companies that are closing over night and wont provide a full time employment.

I feel tha majortiy of people living on a handout dont like that fact they would I believe work but they see that there handicaps prevent them from making enough to survive .I know people that are in the late 30s that work all day in all types of weather and it beyond a possiblity for them to have there own place they just dont make enough .

If people want people to stop free loader then they need to make a ssytem where the tens of millions of vulnerable people can work and also feel apart of this country instead of being thrown in a corner forced to depend on failing companies and a country fallen into a deep dark pit of nothingness.The people need to start promoting so much materilaism and making it seem we can have these fairy tales but see our work does not make this happen .


David 18.08.2009. 00:15

Which advertising medium should I use for my startup business? I am starting a grocery delivery business. My main customers will be the elderly, disabled, affluent, busy, or people with young children. My dilemma is that I don't have a lot of funds to immediately spend thousands on expensive ads, and I'm not going to take out a loan. What are some affordable yet effective ways that I can advertise my business?


Admin 18.08.2009. 00:15

I assume that you will deliver in a certain geographic area only so I would start with flyers delivered to the target area. You might want to do a coupon introductory offer as part of the flyer. You might want to also get on the phone and introduce yourself to the community centers that serve the elderly (maybe you can put up flyers on their bulletin board). Radio advertising is usually relatively inexpensive - just make sure that your ads are targeted to the customer group (i.e. elderly and disabled or affluent and busy or people with young children - don't target all of them with the same message).

Make sure that your message identifies the problem (their inability to get in/out of the store, or their busy lifestyles, or their children), the solution (your service and the time it will save, the money they will save, etc.) and then a call to action ... ask them to order your service on a trial basis (with the first order being discounted 10% - or whatever amount you determine would be an incentive)?


Christie D 29.04.2008. 16:47

The Prisoner's dilemma is used to illustrate the basic idea that? A. oligopolistic firms would be better off if they collude, but each has an incentive to cheat on the collusive agreement

B. oligopolistic firms are always worse off when they collude.

C. oligopolistic firms never have an incentive to cheat on collusive agreements, unlike prisoner's.

D. students who cheat on economics exams end up in jail.

Christie D

Admin 29.04.2008. 16:47



megan 19.08.2007. 19:46

how do the unique relationship between human service organizations and the populations they serve impact? ethical decisions? What are some ethical dilemmas that occur in health care ? who do you think has the greatest power to solve or prevent these dilemmas;organizational leaders, federal or state bodies, or society as a whole? explain


Admin 19.08.2007. 19:46

There IS no 'unique relationship'. The greatest power to solve ANY ethical dilemmas is INDIVIDUAL freedom. My ability to chose not to deal with an organization is the STRONGEST incentive for them to treat me fairly.


Dd 02.04.2011. 23:46

DS: How did you get reliable obedience out of your dogs off leash? Many people run into the problem where a dog refuses to perform off leash because for example, it may have learned that no leash=no correction. How did you remedy this with your dogs? Just curious to hear how different people handle this dilemma.


Admin 02.04.2011. 23:46

With positive reinforcement and proper incentive. Invest in food. Rather than it being a correction thing, it becomes a treat thing. They'll do what you want for a little bit of hot dog or steak.

EDIT: Just Bells, yes, we have pockets, and I assume most people do. I actually would encourage you to invest in a few pieces with pockets. They're all the rage.

Beside the point, however, as if you train a dog on positive reinforcement like food, praise and play, they continue to behave as trained. Ask anyone who has trained a drug or police dog. As far as dangers, why would I let my dog off-leash near traffic? You do training indoors and away from distractions.

Police dogs are trained this way in my National Guard Unit, with the K9 detachment. I'm not saying there's NO scolding when a dog does wrong, but tennis balls and dog treats are used predominately.

=/ Where did I say your method was ALL WRONG? I didn't. In fact, you're the only one who has said that on this entire page. All I said is that positive reinforcement is a valid method of training a dog.

Heather, neither am I embarrassed nor do I think I've behaved childishly, although I suppose I wouldn't think that even if I have. In any case, as you can see, Just Bells has a strict "I'm right" policy, and even when she gets the links and references she asks for to show that that her way is not, in fact, the only way, she refutes it and accuses every one else of being in "la-la land". I don't believe she knows or has spoken to anyone who is a Police K9 handler, the same as she probably doesn't believe I am an MP. However, even if I were to offer proof, she would merely stick her fingers in her hears and sing "I can't hear you, I can't hear you!"

Valiant effort, though.


my nickname 17.12.2006. 04:06

Where does the world of science currently stand on cloning technology? What is currently being researched, and what is currently prohibited in the field of cloning? What are some of the benefits and disadvantages of cloning. In other words, what are some of the scientific incentives for cloning, and the ethical dilemmas associated with them?

In addition, if you have come across any interesting articles in regard to the subject matter, I would be grateful if you cared to share the link.

my nickname

Admin 17.12.2006. 04:06

Most cloning done these days is in Stem Cells. Mainly because of the great need in expanding the lines and new testing.

The main problem with cloning its been discovered is that cells have an internal clock. If you take a sample from a 30 year old person and cloned it, the result would be a new organ or person, that while new, would have cells that believed they were 30 years old! So, if cell samples are not saved from newborns and children then cloning will quickly go no-where! Only by learning to reset this clock will cloning ever take off, after all, why grow a new heart for someone at 80 if the new heart is 80 too? Of course if the old one is worn out, whose going to complain? I'd chance it for a few more months.

After all, that "infant clone" at 10 years old would at a cell level be actually 40 years old and start to get arthritis and other middle-aged diseases! And their only 10! THIS is exactly what happened to Dolly the Sheep. They cloned her from her 4-5 year old "mother" and she started developing aging disease at 1-2 years old, proving that her cells were actually already old. She was actually the same age as when the sample was taken from her mother. She lived a "natural life-span" but was in bad condition physically.


VintageEyes 17.06.2013. 19:51

Can I ask local businesses to help pay for my college tuition? Hello everyone.
I'm having a little trouble with paying my school next fall & an associate of mine told me about contacting local businesses in my home state to help pay my ending balance. She told me to write letters to the owner of the business explaining my dilemma so they could help. I would have to include my GPA and transcripts of course and wait for a reply. She said most businesses probably would like to help with no added cost to me (no working for them once I get out of school or paying them back) because they would want to write it off on their taxes. I've applied to numerous of scholarships and none are coming through & I really don't want to transfer colleges because I would have to start over as a first year freshman again instead of a sophomore.
I do have a job but a summer job is not going to cover all of the expenses.
Is it this legit & a pretty good way to go about getting help for school? Any other ideas that might be of use?


Admin 17.06.2013. 19:51

I hope you realize that the problems with this economy give businesses plenty of tax write-offs

creating their own non-profit scholarship offering and/or donating to an existing non-profit offering (for example donating to the school) is the only way way for a company to gain the tax write-off for contributing to higher education than to contribute directly to an individual

the ONLY employers I have EVER heard of that contribute to higher education either (1) sponsor a scholarship that has a similar application to other scholarships (2) use it as an employee benefit to those who are currently employed (3) use it to attract employees when there is a short-fall.. giving hiring incentives in exchange for work agreements

I am not saying you should not try --- I am saying don't expect results other than the company directing you to a scholarship you can apply for or politely saying they can't afford to support every college grad; therefore, they can't help you as it would be unfair to others.

many students work full-time while carrying a full-time class-load.... sounds like you might need to work more than just over the summer

why, if you transferred to a less expensive (in-state, I am guessing) school.. would you have to start over? are there no credits that will transfer?


krotwort 20.08.2011. 11:56

i am average at maths but i love physics and want to persue my career in space technology or in astrophysics? do i go for it . i am currently in 10th std and in a dilemma
i am also good at arts and very creative . do i go for designing instead . i am equally interested.


Admin 20.08.2011. 11:56

Your love of physics may be the incentive you need to advance your math skills. You'll need the math to do the physics, but if you are doing what you love, it won't be as hard as you may fear.


dacbs04 03.06.2009. 14:17

Do you think impoverished women should be paid financial incentives to practice birth control? This is an idea for countries in Africa and so on. not America.
This is a prompt i was given for a comp class. I was just trying to get some views on the idea, this does not make me racist or ignorant !


Admin 03.06.2009. 14:17

First of all, pushing any kind of medical intervention on someone under duress or supplying any kind of pharmaceutical or medical procedure in the absence of freely-given informed consent is unethical and exploitative.

Second, why would you limit it to "countries in Africa and so on. not America"? It sounds pretty racist to me...why else would it be ok to exploit the poverty of one group of women but not another?

Third, your question implies that the birth control is already there and all these women have to do is to find a reason to use it, but that is not the case in most parts of this world - including America. Birth control is not widely available, even in America, and there is sometimes a moral stigma attached to using it - and in impoverished societies, what little there is tends to be far too expensive for most poor people to use, even if they knew about it. Even when birth control is available, women are often woefully unaware of their options, and a shocking number of women don't even know how their own bodies work.

Education must be the first step in any program to address population issues. This is especially critical in societies in which women's education is not usually a priority, whether due to cultural practices, strict gender roles, poverty, or lack of resources - and yes, even in America, many women do not receive the kind of education that can help them to know and understand their family planning options. When women control their own fertility - when they make educated choices about family planning, birth control, and maternal health - the health and welfare of their families improves, often dramatically. Education can take the stigma away from the use of birth control, can address cultural practices such as early marriage and early maternity, can point out the advantages of smaller and healthier families, and can empower women to take control of their reproduction.

The second step is to then make affordable birth control available to these women so that they can utilize their knowledge and take control of their lives.

Simply paying women to take medication without educating them and involving them in the process does nothing to help them to improve their lives, to say nothing of the ethical dilemmas it poses. Education ensures that solutions to population issues are not imposed on anyone, but are implemented with the full participation of the people most affected by the problem. Many have found that the confidence and sense of empowerment that women have found from taking control of their own reproduction spill over into other areas of their lives, improving their overall quality of life as well as the lives of their families and their communities.


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