Last night I was visiting a doctor friend of mine and we got talking about the hospital situation…specifically the Emergency Room. “Why in the world does it take an average of 4 hours to get through the ER,” was the question that I posed.
Hourly vs Incentive
Jim went on to tell me that he has worked for several hospitals but the one whom he works for now is by far the most productive. At Jim’s hospital you will not wait even close to the national 4-hour average. Why? Doctors at Jim’s hospital are paid based on performance where the majority of other hospitals pay their doctors an hourly wage. Doctors who are paid based on performance want to see more patients because that means more money. Doctors that are paid an hourly have a tendency to see more patients as an inconvenience rather than an opportunity. (Hey, you would be no different.)
Here is the moral of the story: If you want your sales staff to earn more or your marketing team to produce more than you should pay them based on performance not salary only. Give your team an incentive to produce and they will. In short bribe them to do better.
If your marketing team earns an average salary and are given an incentive for producing X amount in sales do you think that they will perform better or worse?
- Quicktrip, a national gas station chain, gives their managers a bonus based on the quality of their customer service. I have never had a bad experience with their employees or their gas station.
- Sam’s Club gives their employees a bonus based on the amount of profit that they receive on the P/L (profit/loss) statement. Do you think their employees are careful to save money? Reduce waste? And they even get a kickback from recycling.
What incentive does your team have for producing maximum results? Your staff will perform better with the promise of a reward (i.e. money) rather than the threat of punishment (i.e. loss of job)
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