Motivate Your Core Performers to Become Star Performers

No sales force consists entirely of stars; sales staffs are usually made up mainly of solid performers, with smaller groups of laggards and rainmakers. Though most compensation plans approach these three groups as if they were the same, research shows that each is motivated by something different.

As the largest cadre, core performers typically represent the greatest opportunity, but they're often ignored by incentive plans. At the same time, they're the group most likely to move the needle — if they're given the proper incentives.

Why does this valuable group tend to be off the radar screen? One reason is that sales managers don't identify with them. At many companies the managers are former rainmakers, so they pay the current rainmakers an undue amount of attention. As a consequence, core performers are often passed over for promotion and neglected at annual sales meetings. But this is not in the best interest of the company. Core performers usually represent the largest part of the sales force, and companies cannot make their numbers if they're not in the game. Here are some proven strategies for keeping them there.

Multi-tier targets. A project that Mike recently worked on with a national financial services company shows that such targets help motivate core performers. At the company a major proportion of the salespeople fell into this category. In bearish months they almost always found a way to hit their targets, but in bullish months they seldom exceeded their numbers substantially. In an effort to nudge them upward, the company experimented with tiered targets.

The first-tier target was set at a point that a majority of the company's sales agents had historically attained, the second-tier target at a point reached by a smaller percentage of the sales force, and the third-tier target at a point hit only by the company's elite. All the firm's agents were divided into two groups: The first was given targets at tiers one and three, and the second group got targets at all three tiers. The hypothesis was that tiers would act as stepping stones to guide core performers up the curve.

The tiered structure indeed had a profound impact. Core performers striving to achieve triple-tier targets significantly outsold core performers given only two tiers. By contrast, multi-tier targets did not motivate stars and laggards as much: No significant differences in performance were found for those segments.

These results suggest that core performers exert more effort if given additional tiers. Stars are presumably unaffected by the extra stepping stone because they view the top tier as attainable regardless of the number of targets. And the inattentiveness that laggards show suggests that they typically aim for and are satisfied with achieving the first-tier target.

Prizes. A research project that we're both currently working on investigates how prize structures in sales contests can engage core performers. The problem with contests is that stars usually win them. Knowing this, core performers don't bump up their own efforts. You can handicap contestants on the basis of their prior performance, which alleviates the problem to a certain degree. But that creates its own problem: What's fair about core performers' and laggards' taking home the top prizes, if stars are left with lesser prizes or no prize at all?

Ideally, sales executives would design contests so that both stars and core performers would go home satisfied. This isn't easy to do, but if you keep in mind that people are hardwired to adapt to their position in a social hierarchy, it is possible. The key is to offer gifts (not cash) for the lower-level prizes that can be seen as equal, or even superior, to the top-level prizes on some dimension. Suppose a prestigious golf vacation is awarded as a top prize and a local family getaway is awarded as a lower prize. The family getaway has a lower market value than the golf vacation, but core performers can adapt to their central position on the performance curve by shifting their preferences. They can rationalize their prize by saying, "I've golfed plenty lately — what's important to me is spending time with my family." We consistently find that core performers work harder and perform better in contests of this kind than they do in contests with cash prizes.
Furthermore, their increased effort does not come at the cost of decreased effort from stars or laggards.
However, this approach won't work if the gifts offered at lower performance tiers are simply lower-grade versions of those at the top tier. Core performers will never perceive 18 holes at a run-of-the-mill golf course as more desirable than 18 holes at a prestigious course. The lower-level prize must have some quality that the higher-level one does not. In this example, it was the local getaway's family appeal that allowed core performers to remain engaged in the contest.

You will be able to coax better performance from your team by treating your sales force like a portfolio of investments that require different levels and kinds of attention. Sales compensation plans that take into account the different needs of different salespeople — and that are based on real evidence rather than assumptions — will ensure that your sales department gets a significantly higher return on its investments.

http://blogs.hbr.org/cs/2012/08/incentivize_your_core_performe.html