Eliminate "Welfare Subsidies" For Underachievers
By Dave Anderson
Once upon a time you had to "earn it." And people didn't mind. They expected it. Then came LBJ, his Great Society, and the age of entitlement. People started getting the prize without paying the price. And soon the psyche created by rewarding non-performance in society carried over into business. Everyone wanted to be treated alike instead of being treated in a manner they earned or deserved. In most organizations, unequal performers demanded and got equal playing time, opportunities, support and were allowed to participate equally in monthly bonus plans, contests and spiffs. Somehow over time, the age of earning was replaced by the age of keeping everyone happy. We began to weaken the strong in order to strengthen the weak, with widespread mediocrity the inevitable result.
Wouldn't it be great if your business could usher in an age where people had to "earn it" again? Where managers focused, not on making people happy, but on making them better. Where workers would be given time, energy, opportunities, promotions, resources and rewards according to their contribution; not their tenure, experience, or because they are "next in line." We could begin to send that message with how we handle monthly bonus and spiff programs. Too often, everyone is allowed to participate in these privileges without regard to past performance. If they're on the payroll, they're in. But what if these privileges weren't automatic? What if you had to qualify in order to participate? Would this make some people unhappy? Yes. Would it also send a message about your expectations, standards and priorities? Absolutely. Could it make your top people, the truly deserving, feel more special and appreciated? Without a doubt. Could having to earn your way into monthly bonus and spiff programs create more focus and urgency from those who have just been along for the ride? Yes. And initially, they'll hoot and holler, but your job is to stretch people, not to maintain them. You do no one a favor by setting a soft set of expectations or by allowing them to cash in on mediocre performance. Consider the following ideas to put the privilege back into your monthly bonus and spiff programs and thin the ranks of underachievers currently receiving the equivalent of welfare subsidies each month just because they happen to show up to work.
Set a minimum standard people must meet in order to participate in contests, monthly spiff or bonus plans. People should have to qualify. Set the standards and give notice that everyone not at a certain level of performance at the end of a sixty day period will no longer participate in monthly bonuses, spiffs or contests until they rise to that standard.
Bonuses are not an entitlement. You should have to maintain a certain level of performance before you're eligible to participate. Automatic enrollment in monthly bonus plans or contests cheapens the plan, causes people to take it for granted and diminishes the positive affect it has on top performers.
When you reinforce average performance, you get more average performance. In our business, the average salesperson sells about ten cars per month. But when we announce the monthly bonus plan, everyone is normally allowed to participate. Those selling 6, 8, and 20 per month normally all share in the same plan. We may offer a $10.00 spiff for each demo drive during the month or for each deal written, or $25.00 when an extended warranty is sold, etc. The problem with this is that the guy selling 8 cars per month, a below average job, can still earn several hundred dollars of bonus money during the month. In essence, he's being rewarded and reinforced for selling 8 cars per month and psychologists tell us that when you reinforce a behavior you legitimize it and can expect more of it. That's why so many people continue to sell the same substandard amount; it's being reinforced and rewarded. The best way to change behavior is to change the consequences of that behavior. And as long as people are allowed to cash in on poor performance, you'll get more of the same. A monthly bonus plan should be a reward for above average performance, not a welfare subsidy for underachieving. Once people qualify, they can participate. This makes it mean more. They'll hold it in higher esteem and won't take it for granted. This also makes your monthly bonuses more of a privilege for the people who actually deserve it.
Put privilege and honor back in your contests and spiff plans by making people earn their way into participation. By eliminating welfare subsidies for underachievers, you'll have more dollars to give to your best performers. No smart organization weakens the strong in order to strengthen the weak. As Vince Lombardi said, "There is nothing more unequal than the equal treatment of unequals." And if you're worried about de-motivating those who won't be allowed to participate, wake up! If your current bonus programs were effective, they'd be more motivated and wouldn't be corrupting your workplace with mediocrity.
Dave Anderson is president of The Dave Anderson Corporation, a sales, management and leadership training concern. Dave conducts "Leading At The Next Level" workshops and publishes "Leading At The Next Level" newsletter. He is the author of "Selling Above The Crowd: 365 Strategies For Sales Excellence" and his web site, www.learntolead.com has free training articles and materials updated weekly. Dave is a member of The National Speaker's Association and conducts workshops and keynotes worldwide. danderson@dealeronline.com
