Interview Tom Foster (Management Skills Blog) – Part 4 of 6

Q4 Dr Lisa: We find that incentives or bonus programs only useful in a small number of cases. Are management incentives or bonus compensations schemes ever appropriate in your opinion?

Tom: I hear managers, especially in the sales arena decry that their best salespeople are only motivated by money and the best system is straight commission.

Okay. Let's say, I buy that. Let's say there are people who are only motivated, or mostly motivated by money. And what's more, let's say I need that kind of person on my sales force. I want someone who is willing to work three extra hours every day, make that extra sales call, do that last pitch.

Have you ever met a salesperson like that? I have. And what impact do they have on the rest of the organization? My experience is that they are prima donnas and wreak havoc on the rest of my people and my company culture.

BUT I NEED THEM.

Okay, I need them. But they are not an employee. They are not a team player. They are self-employed. Willing to put their compensation at risk, eat what they kill. So pay them like they are self-employed, on a 1099. And keep them the hell away from the rest of my people..

..to be continued.

Here's to maximizing YOUR profits!
Dr Lisa Lang
(c)Copyright 2008, Dr Lisa, Inc. All rights reserved.

Are you a Vistage/TEC member who would like your team to hear my speech? Here it is: NEXT Maximizing Profitability Event (no charge): December 1, 2008 in Denver from 1:00 to 5:00 pm at the Science of Business Training Center. More information at http://www.viable-vision.com/.
You can register by fax or on-line.

Next Mafia Offer Boot Camp -- is December 2, 3, 4 2008 in Denver.

Interview Tom Foster (Management Skills Blog) – Part 3 of 6

Q3 Dr Lisa: As you know we recommend against most incentive or bonus programs. How does the prevailing belief by Western management that incentives are effective relate to the “best efforts” contract?

Tom: Yes, incentives are effective. They are most effective at creating mistrust in the organization. They violate the implicit contract between the employer and employee. Incentives lay the groundwork for counterproductive relationships and sow the seeds for deceit. Incentives pit manager against employee in a game of underperformance, where the carrot rules.

Even worse, managers use incentives to abdicate their responsibility to hold people accountable for performance. Managers throw up their hands and say, "the only way I can hold my people accountable is to withhold part of their pay until they meet the performance standard." If that is the only strategy a manager has to hold people accountable, then I think I need a different manager.

...to be continued.

Here's to maximizing YOUR profits!
Dr Lisa Lang
(c)Copyright 2008, Dr Lisa, Inc. All rights reserved.

Are you a Vistage/TEC member who would like your team to hear my speech? Here it is: NEXT Maximizing Profitability Event (no charge): December 1, 2008 in Denver from 1:00 to 5:00 pm at the Science of Business Training Center. More information at http://www.viable-vision.com/. You can register by fax or on-line.

Next Mafia Offer Boot Camp -- is December 2, 3, 4 2008 in Denver.