Game the Plan

“Gaming” Your Incentive Compensation Plan

“Determining how to use incentives to motivate sales reps has always been on the top of management’s list and it’s always been a difficult task.” Executives worry that salespeople will “game” their incentive compensation plans – that is, search for loopholes to maximize their income. Employees always try to earn the most they can within the confines of any incentive program. But maximizing sales reps’ income also should maximize the company’s sales and profits. If your incentive plan doesn’t have that result, you should reconsider its design.

Implement robust compensation programs and hope that your employees will game them. When they do, they’re working to attain goals that directly benefit your company and maximize its returns – and that boosts their incomes as well. This is a win-win situation. Your incentive plan promotes the behavior you want from your employees as they make extra money. However, do not rely on money as the sole incentive as you plan your compensation program. Do your research and build up a deep understanding of your employees and what motivates them. Make sure your compensation plan rewards only...