I agree with his idea of monthly incentive, which can be implemented soon without a big finantional impact.
It takes a time to remake compensation plan and implement it, but the ABC Computers has alreday started loosing their sales reps. The Management should take some action to show that they listen to voice of their employees.
Curtis wrote:
QUESTIONS FOR DISCUSSION Reply:
1. What happened at ABC Computers that led to such a disappointing turn of events (e.g., high employee turnover, disengaged employees, etc.)?
The company failed to recognize their employee’s efforts and hard work when the staff would meet their specific sales targets. When some like Tanaka-san, who is well respected and liked by his fellow co-workers, isn't able to work with upper management to get some sort of incentive for meeting their sales targets, the employees lost faith in the company. From this point on, motivation started to go down and led his co-workers to search for new jobs and go somewhere they felt they would be appreciated and rewarded for their efforts.
2. What can you learn from this case study that you can apply to your own organization?
From my own personal experience with my previous job, I experienced the same thing when it came to compensation. I went from being a very motivated, eager to learn and to take on new tasks, to an employee who was just "there".
It all started when it came time for my annual performance review. Although I scored well, I was told I wouldn't be getting a raise this year due to budget constraints. This destroyed my motivation and left me wondering if I really was appreciated by the organization and if I was working real hard for nothing. So it made me wondering, “Why should I work so hard if I am not going to be rewarded for it?” I still had faith that maybe I would get raise next time and hoped for the best.
When the time came up for my 2nd performance review the next year, I was able to secure a raise but only a very small one, only $100 extra per month, which covered most of my train pass for the month. From that point on, I started to plan my exit from the company and just waited for the right time to leave. I had no motivation to work hard and go the extra mile knowing no matter how hard I worked, I probably wasn't going to be rewarded and if I was, it wouldn't be much.
3. If you are in Tanaka-san's shoes, what would you recommend to the management of ABC Computers?
I would recommend that management create some sort of incentive bonus for meeting the sales targets. This incentive bonus could either be paid monthly or paid out at the end of each quarter to reward them for their hard work. If they meet their target they get X% for a bonus, if they smash their target they get up to X%.
I might also suggest they offer some sort of monthly incentive such as a a paid day-off with a nice dinner at some restaurant for two or tickets to events (i.e. concerts, sporting events, amusement parks and so forth) to the top performer each month to keep the team motivated month to month. Although it is small, it will keep them motivated throughout the year and remind them that they are being rewarded for their hard work.
