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Explained: Why your cash only sales incentives never produce consistent results


The cash-based sales incentive is the archetypical “throw money at the problem” answer to sales teams with flagging revenue figures, but the majority of cash-based incentive programmes end in diminishing returns and a great deal of head scratching about why good old-fashioned money isn’t producing the results companies want.

The truth is that cash on its own, as a motivator, isn’t as inherently linked to motivation as employers, or even employees, would like to think it is.

Among the variety of reasons that these cash incentive schemes fail, there are four big areas:

Survival through compliance

Many employees don’t want to change their behaviour, but will bend their work to the whims of their company like a tree in the wind. While they flex and sway, they ultimately don’t go anywhere new.

Cash incentives prompt employees to do just enough to meet the prevailing wind’s demand without addressing why their work was underwhelming in the first place, and they’ll inevitably revert to their old habits if allowed.

Lazy use of resources

Cash incentives don’t necessarily improve long term performance, but still a great deal of energy is dedicated to quibbling and fretting about the appropriate amount to spend on cash incentives, and which behaviours to attach them to.

In many cases the cash and energy required to build and maintain an incentive scheme could be better spent improving the company, its culture, work environment, engagement and training.

Incentives aren’t special forever

Excessive reliance on cash sales incentives can be procrastination for addressing performance issues, but pulling the plug can seem an impossible task. The cash incentives can become so commonplace they’re no longer a reward but extra income employees are dependent on, long past the point of any benefit to staff, and employers are left without wiggle room to fix performance and culture problems.

Reinforcing old work habits

What a company chooses to distribute cash incentives in exchange for becomes the de facto set of values and priorities for the sales team; cash incentives for predictable behaviours like meeting revenue targets generate predictable working patterns and stifle creativity.

So, what do you actually need to do to make an incentive scheme work?

Abandon cash

Cash has value, but that value is limited; it’s the same old currency used in the monthly exchange of money for services. As such, cash is familiar and subject to the same anxieties and stresses as the monthly pay packet. A non-cash reward costs less to fulfil, and comes with a trophy value which is more valuable to employees’ sense of job satisfaction than just cash.

Periodically refresh incentives

Don’t let your sales incentives get stale. Change the pattern of rewards, the value of rewards, and the behaviour and outcomes you want to incentivise your employees to achieve. This stops any sense of dependency setting in as well as keeping incentives fresh and interesting.

Reward positive behaviour

Incentivise sales staff for not just getting rewards for the figures on a spreadsheet, but for their holistic role in the company. We’ve spoken before about how to pick behaviours which are worth rewarding in our blog here. It’s possible to create insular, toxic sales cultures which undermine your company’s values with cash-only incentives.

Keep your scheme simple

Make sure what you’re pushing employees to do is achievable and reasonable, and the reward system is similarly built to be as accessible as possible. Roadblocks can make incentives feel unworthy of pursuit, and difficult to access rewards mean employees are less likely to pursue them.

Address your company culture

Cash makes a poor substitute for genuine interest and enjoyment from work. Commit to producing a more hospitable workplace, greater job satisfaction and working processes which counter job dissatisfaction and frustration, eliminating the need to bribe employees to produce results. With this dealt with, it will be easier to effectively employ non-cash incentives for positive outcomes in the future.

Ultimately, cash-only incentives fail, whether it’s at the SME level where they fail to engage sales teams struggling for numbers or at the financial institution level, where they breed toxic money-first subcultures. Sales incentives do still work, but the rewards and incentive structure need to be layered on top of a healthier approach to work and a strong, ethical company culture