Reward Process, Not Just Results

Rewarding only results when you are not able to observe the process for achieving those results is unwise.

Managers make a huge mistake when measuring goal attainment by not taking into consideration factors that are beyond an employee’s control such as the economy, a natural disaster, bankruptcy of a client, etc.

The fact is that results vary with changes in the market and other external variables that are often beyond an employee’s ability to control.

How many east coast companies will do the right thing and realistically modify quarterly goals as a result of Hurricane Sandy?

What an employee can control is his/her specific behaviors that are critical components to the successful completion of an operation such as the sales process.

During the Great Recession, we observed a number of businesses that did not lay off salespeople when revenue declined.  Rather, these companies got back-to-basics and stressed the fundamentals of the sales process that they know worked in their industries.

In essence, these companies were saying, “If you consistently follow our sales process as we have outlined it, the results will take care of themselves.”

Along with this emphasis on process, these companies made a concerted effort to observe and reward the vital behaviors of that process that the salespeople exhibited, rather than just sales totals.

In fact, total sales in these businesses were modest in comparison to the pre-recession sales.  But, these companies realized that total sales were more a reflection of outside forces in the economy, rather than the salespeople themselves.

The decision to emphasize process over results in these companies has now created a sales force that is “paying dividends” as the economy improves and the salespeople are utilizing the vital behaviors that are important to driving sales.

HR POINTER: Of course, results matter.  Companies can’t pay bills with effort.

However, without celebrating the effort (i.e., the process), we end up with selfish prima donnas who don’t care about “the assist” that helps the team win, only their personal score which helps them win.

When we noted above that the companies “rewarded” vital behavior, we were not necessarily referencing financial rewards, but more importantly intangible/social rewards.

The rule of thumb relative to rewards is a ratio of 20:1, which means for every 1 tangible reward (e.g., money, gift cards, etc.) a manager must provide at least 20 intangible or social rewards (e.g., verbal recognition at meetings, thank you notes, additional responsibilities, etc.)

To review our approach to Monetary and Non-Monetary recognition, click on the link below

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