Sales Motivation: Rethinking Compensation Plans

A VC friend of mine forwarded a clip by Dan Pink to me last week. Dan Pink is probably best known as Al Gore’s speechwriter, but he is also a career analyst and “motivational” expert.

 

This 10 minute YouTube video is worth watching.

 

 

 

Based on a study done at MIT (and replicated many times over) – the traditional “carrot and stick” performance scheme doesn’t work. Let me rephrase that, it DOES work, but only if the behavior that you are looking for is mechanical in nature.

 

According to Pink, if the task involves even rudimentary cognitive skills, then a higher reward leads to POORER performance. Yes, you read that right - a higher reward to POORER performance.

 

So does that mean that we need to throw out our compensation plans? No, but according to this MIT study, people are motivated by:

 

·       Connection to a purpose

·       The desire for mastery

·       The ability to be self-directed

Pink’s conclusion is that we need to treat people better than “better smelling horses” (easily manipulated with carrots and sticks) if we want to achieve greatness in the workplace.

 

Pink has a couple of books that I’d also recommend:

 

• A Whole New Mind: Why Right Brainers will Rule the Future
• Drive: The Surprising Truth About What Motivates Us