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It may be true, as the old saying goes, that "Virtue is its own reward." Yet, as managers operating in the modern workaday world, we know that salespeople need more tangible forms of acknowledgment to maintain a high level of motivation and performance.
The important point here is not so much what you reward your salespeople with as what you reward them for. Specifically, do they receive praise, pay raises and other perks based solely on the outcome of their efforts – the dollars and sales they generate? Or are they compensated equally for their input – the methods and behavior they bring to their work and rely on to achieve theses results?
Outcome-based management or input-based, which is better? The answer seems to be that a judiciously blended mix of both is essential because of the broad spectrum of basic objectives most companies share. These can include serving customer needs, solving customer problems, expanding market outreach, building a reputation for integrity and reliability, and improving the caliber and effectiveness of the sales force. But, they also include other and sometimes conflicting aims, among them meeting short-term volume and profit targets, controlling sales costs, and staying abreast or ahead of competition.
Using the Outcome Yardstick
Historically, most companies have relied heavily on outcome-based management. It provides a seemingly accurate and objective standard of measurement, independent of the manager's personal reactions to the employee concerned. It offers ease and consistency of application. It allows the salesperson to evaluate his or her performance by tangible standards and can be strongly motivational because of the direct, clearly perceivable connection between achievement and reward. Outcome-based management is also popular because it requires relatively little supervisory involvement and observation – an attractive feature given the considerable amount of time salespeople spend out of the office.
So far, so good. But exclusive reliance on outcome-based systems may not adequately serve long-range corporate objectives. For one thing, selling can often be a discouraging job. It lacks some of the morale-sustaining status of other professional occupations. And it can be a roller-coaster ride where even the best and brightest run into protracted dry spells. Thus, if there are no rewards, tangible or psychic, for anything but making the quota, salespeople's self-esteem may suffer to the point where they lose confidence, assertiveness and the willingness to go after larger, more difficult accounts.
More importantly still, since outcome-based management focuses on ends rather than means, it does little to foster continuous growth in skills, professionalism and creativity. By the same token, and also because of its impersonality, it does not instill the kind of loyalty that will keep salespeople from jumping ship if the business suffers temporary setbacks.
Payoffs for a "Process" Approach
Admittedly, rewarding salespeople for the quality of their input – the strategies and tactics they employ, the energy they invest in their work and the knowledge and understanding they bring to it – also has its difficulties. It demands high-order communications skills including the ability to listen and observe as well as to talk. It calls for the commitment of sizable and regularly scheduled blocks of management time for monitoring and coaching. Although, it does provide some tangible standards for performance measurement, among them: depth and breadth of information on product, market and competition; average number of sales calls made; quality of customer service provided or participation in sales training programs. Some subjectivity, of course, is inherent in the process.
On the other hand, input-based management has built-in professional and personal growth components. The salesperson has the chance to learn from experience and manager feedback what works or doesn't and why. It offers the opportunity for behavior modification which has deeper and more lasting impact than nuts and bolts schooling in specific techniques. Management capabilities, too, will be improved as supervisory personnel find themselves forced to think out and clarify precisely what types of job behavior are desirable in the company's and the salesperson's long-term interest.
Equally important, input-based management sends salespeople a strong and positive signal. It tells them that the company is interested in them as human beings not just as cogs in a machine... and is willing to demonstrate that concern by accepting deferred results. That, of course, will inspire loyalty and commitment in return. Strengthening this dynamic, the active monitoring and coaching involved builds free-flowing, two-way channels of communication, interaction and support.
The more that management is input-based, the more time and care salespersons will spend on pre-call planning and post-call follow-up. By easing the pressure to produce, produce, produce it encourages low-pressure selling and a long-range approach to building customer ties with resultant benefits in repeat business and market-expanding word of mouth.
Here, as in other aspects of business, there's no such thing as a free lunch. The benefits of input-based management may have to be paid for in temporarily diminished short-term sales results. But a tradeoff which produces a judicious mix of outcome and input-based management will prove a powerful tool for motivating sales staffs to work more rewardingly, productively and profitably over the long haul.
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