Digest

This podcast discusses the prevalent issue of salespeople gaming incentive systems to maximize personal gain, often at the expense of company objectives. It explores various schemes, such as "partnering" with customers to exploit promotions, falsifying data, and sandbagging. The concept of "immoral imagination"—anticipating how individuals might exploit a system—is highlighted as crucial for designing effective incentive plans. The podcast details methods for identifying gaming behaviors through data analysis, emphasizing the importance of assessing the frequency and severity of actions to determine appropriate responses, ranging from increased monitoring to performance management and plan revisions. Strategies for responding to discovered gaming, including collaboration with sales leadership and maintaining morale, are discussed. Finally, the challenges of changing long-established incentive structures and the importance of collaborative change management are addressed, emphasizing the potential impact on employee morale and retention and the often higher cost of inaction.

Outlines

00:01:11

Understanding and Addressing Sales Incentive Gaming

This podcast introduces sales incentive gaming, detailing common schemes like data falsification and "partnering" with customers. It emphasizes the importance of "immoral imagination" in designing robust incentive plans and using data analysis to detect gaming behaviors. Effective responses range from monitoring to performance management and plan revisions.

00:15:48

Responding to and Preventing Sales Incentive Gaming

The podcast covers strategies for responding to discovered gaming behaviors, considering the frequency and impact of actions. It stresses collaboration with sales leadership, balancing addressing the issue with maintaining morale, and the long-term implications of incentive structure changes.

00:22:11

Long-Term Incentive Structures and Change Management

This section focuses on the challenges of modifying established incentive structures, highlighting the importance of considering the cost of inaction and employing collaborative change management to minimize negative impacts on employee morale and retention.

Keywords

Q&A

• What is "immoral imagination" and why is it important in designing sales incentive plans?

  "Immoral imagination" is anticipating how people might exploit a system. It helps prevent gaming behaviors, creating motivating and ethical plans.

• What are some common ways salespeople game incentive systems?

  Common tactics include "partnering" with customers, falsifying data, sandbagging, and misrepresenting product information.

• How can companies identify and address sales incentive gaming?

  Analyze sales data for patterns, assess the frequency and impact of behaviors, and respond accordingly—from monitoring to performance management and plan revisions. Collaboration with sales leadership is crucial.

• What are the potential consequences of ignoring sales incentive gaming?

  Ignoring gaming can lead to increased costs, revenue loss, reputational damage, and legal/compliance risks. The cost of inaction often outweighs addressing the problem.

• How can companies communicate changes to incentive plans to avoid negative impacts on morale and employee retention?

  Collaboration with sales leadership and transparency about the reasons for changes and the collaborative process in their design are key to minimizing negative reactions.

Show Notes