Maybe I’m the only one, but I was surprised when I heard Olympic athletes get performance bonuses for bringing home medals. In Canada our medal winners can expect $20K for gold, $15K for silver and $10K for bronze. It’s a practice we started in 2008 and the bill, as of the 2010 Vancouver Olympics, is roughly $2.3M. It’s great to see that we’re supporting our athletes, but it did raise a few questions.
Like, what does a gold medal taste like?
Is a bonus really necessary? Shouldn’t the gold medal and sense of accomplishment be enough? Is a few thousand dollars really going to make the difference between going for gold and settling for silver?
It didn’t take long to realize that these are the same questions employers ask when considering employee performance incentives. Great sales professionals typically have lucrative compensation plans that ensure they’re rewarded for their success, so why bother with a pat on the back and a trip to Jamaica if they exceed quota?
In sales terms qualifying for the Olympics would be like hitting your target, while landing a gold medal is like pulling down 200% of quota. Nobody, whether they’re a software sales executive or an Olympic decathlete, is going to hit target without skill and passion. The bonus is a way of showing them that your appreciation of them goes beyond contractually mandated levels, much like their contribution did.
Your sales force might shoot for these goals beforehand, just like Olympic athletes probably look forward to the $20K at the top of the podium, but the real value comes from validating the commitment they made to your organization. Appreciation builds loyalty and your top performers are the last ones you want to feel under-appreciated.
You can also make the effort to keep your incentives fresh, so there’s always excitement about earning them. If you’re offering a trip to Vegas every year it diminishes the authenticity of the gesture. You can also experiment with smaller, more immediate rewards rather than taking the annual approach.
You don’t need to hand out medals to recognize excellence, but don’t wait four years to put your top performers on a podium.