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    How Employee Incentive Contests Can Backfire, Demotivate Performance and Destroy Company Culture
    Beth, a longtime friend of mine, is a sales rep for a large pharmaceutical company. She lives in Boulder and covers a five state territory. Like most competitors in this industry, Beth's company promotes an annual Winner's Circle incentive trip to an exotic destination for only the top 5 pro [...]


    How Employee Incentive Contests Can Backfire, Demotivate Performance and Destroy Company Culture


    Beth, a longtime friend of mine, is a sales rep for a large pharmaceutical company. She lives in Boulder and covers a five state territory. Like most competitors in this industry, Beth's company promotes an annual Winner's Circle incentive trip to an exotic destination for only the top 5 producers among a staff of 48 sales reps in her division. The rules and metrics of the competition change slightly from year to year, but it's based primarily on exceeding a sales quota determined somewhat arbitrarily by the VP of Sales in the corporate office in Chicago. As you might imagine, Beth spends a great portion of her time traveling to and from accounts; from Omaha to Salt Lake, and from Albuquerque to Casper. The sales rep that beat her out for the fifth and final spot this past year covers only the Dallas/Fort Worth metropolitan area. To add insult to injury, Beth exceeded her pre-established quota by more than $220,000, but still lost out on the all-expense paid trip to the Grand Caymans because her counterpart in Dallas beat his much lower quota by a mere $317 more than Beth exceeded her's.

    BEST PRACTICE: A CULTURE THAT INSPIRES EVERYONE TO WIN

    A neighbor of mine, Tony, sells windows and siding for a large big box retailer. His company's incentive trip is set up with a completely different new school mindset. Every sales rep in his company whose annual sales exceed one million dollars gets to go on an all expense paid luxury cruise tabbed "The Million Dollar Boat." There's no fluctuating quota established by some wizard hiding behind the company curtain. Rather, this is a very transparent and defined sales goal. Granted, it's not easy to get on that boat, but any third-grader could understand the rules. And there are no managerial politics involved in deciding who goes. Tony has been on this trip five years in a row and he says it's one reason he loves his job and has no desire to work anywhere else.

    CULTURE: A SMALL WORD THAT MAKES A WORLD OF DIFFERENCE

    When Tony has an idea or learns a technique that helps him increase his sales, he eagerly shares it with all his associates. After all, Tony wants all of his coworkers to 'win' and get on the boat with him; e.g. "the more, the merrier!" His company fosters a culture of collaboration and celebration that inspires everyone to work harder, perform better, and stay longer.

    When Beth has an idea or learns a technique that helps her increase her sales, she's motivated to keep it a secret. After all, why would she want to help a coworker increase their sales if it puts them in the Winner's Circle and leaves her out? For the second year in a row, Beth had a record-breaking year and was her company's 6th top producing sales rep, and she didn't even get a plaque. 

    Did this result motivate Beth to work harder next year? Hardly.

    It did, however, motivate her to begin circulating her resume' and start returning the multitude of calls she's been getting from headhunters.
    ________________________________________________

    Discover how to go beyond mere employee engagement in Eric Chester's new book, On Fire at Work: How Great Companies Ignite Passion in Their People Without Burning Them Out available this fall. 

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