Earlier this week, we wrote a piece called "Why increasing commissions won't improve your sales results", and we spoke a lot about how traditional methods of motivating sales people will NOT be as effective in 2014.
Well, continuing upon this theme, today I want to share a fantastic talk with you guys, by Dan Pink - author of "To Sell is Human: The Surprising Truth About Moving Others" and "Drive: The Surprising Truth About What Motivates Us". By the way, if you're interested in the psychology behind motivating sales people (and teams in general) - Pink's books are must-reads.
In this video, Pink makes the case (and uses evidence) to show that that for complex, creative tasks (much like selling in 2014), rewards such as bonuses and commissions increases actually hinder performance, and may even hurt your sales results.
Pink argues well, that bonuses and rewards worked in the 20th century, when the majority of work-related tasks were mechanical and required little cognitive action.
"As long as tasks only involved mechanical skill, bonuses worked as they would be expected: the higher the pay, the better the performance. But once the task called for even rudimentary cognitive skill, a larger reward led to poorer performance. In 8 of the 9 tasks we examined across the three experiments, higher incentives led to worse performance".
Some key quotes from Pink's talk:
- "Incentives were designed to sharpen thinking and accelerate creativity, and it does just the opposite. It dulls thinking and blocks creativity. What's interesting about this experiment is that it's not an abberration, it's been replicated over and over again for nearly 40 years."
- "This is one of the most robust findings in social science, and also one of the most ignored. I've spent the last couple of years looking at human motivation. There's a mismatch between what science knows and what business does."
- "If you look at the science, there is a mismatch between what science knows and what business does. And what's alarming here is that our business operating system -- think of the set of assumptions and protocols beneath our businesses, how we motivate people, how we apply our human resources -- it's built entirely around these extrinsic motivators, around carrots and sticks."
- "The good news about all of this is that the scientists who've been studying motivation have given us this new approach. It's an approach built much more around intrinsic motivation. Around the desire to do things because they matter, because we like it, because they're interesting, because they are part of something important."
So, with all of these findings in mind, it becomes clear that sales managers have some new challenges. Motivating and retaining talent is no longer about carrots and sticks. It's about driving autonomy, responsibility and a desire to improve their abilities.
Takeaway: When creating sales contests - think about how your competition drives these instrinsic motivators. Make sure you emphasize driving the company forward and being part of a great culture and team.
How are you driving motivation in your sales organisation?
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