The end of bonus as key motivator

Bonus has long been the driver for commercial performance. The better your results, the more financial bonus you are rewarded. But with Sales becoming increasingly challenging,    the extra stimulation of a bonus seems to be reaching it’s limits.

For a standard job, a bonus can be effective, but standard jobs are up for automation, so the added value of a sales professional comes on top of the automated standard jobs.

Experiments have been done by MIT and the university of Chicago, showing that as long as a task involves only mechanical skill, bonuses work as expected. Once the task called for rudimentary, cognitive skill, a larger reward led to poorer performance.

At work money is a motivator, but if you actually pay enough, people start thinking about the job, instead of the money, being motivated to perform. If you want engagement, self directed is better.A nice example for a software company is shown in the video below; developers get 24 hours to develop what they want with whoever they want. The results of this 24 hour exceed the results of the previous month.

Why do people do things? Big motivators are fun and getting better at things. Think about the motivation of people developing in an open source culture. People with jobs spending 20 to 30 hours a week to create a product, and then giving away the progress. For free!

According to Dan Pink, former speechwriter for Al Gore, traditional rewards are not always as effective as we think.

If you want people to perform better, you reward them, right? Bonuses, commissions, their own reality show. Incentivize them. … But that’s not happening here. You’ve got an incentive designed to sharpen thinking and accelerate creativity, and it does just the opposite. It dulls thinking and blocks creativity.” (Dan Pink)

Even better is the RSA Animate on Youtube:

About the author

Over the past few years Walter van der Scheer has been evangelizing marketing automation to advertising agencies, e-commerce companies and co-workers alike and has been building a team of determined sales professionals. He has made progress, but the road ahead is still very long. Walter shares his personal experiences and challenges along the road of changing the way that marketing is done, while trying to stick to the strategically chosen path. +

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