Archive for October 2011

Long term readers of this blog will appreciate that I am fascinated by two things: one is about the process of how people make decisions, and the other is about how and why people are motivated to do things. This blog tends to look at those topics within the context of sales – but of course they are not limited to this.

My IFA (the excellent Andrew Stinchcomb of Integrity Financial) recently drew my attention to the book “Drive: The surprising truth about what motivates us” by Daniel H. Pink. And it really is a fascinating read.

Most organisations believe that it is a requirement to motivate sales people by commission. It’s pretty normal for our industry. Well research quoted in “Drive” would suggest that this is counter productive and counter intuitive.

Research undertaken by Deci (I won’t go into the details, you’ll have to read the book) comes to the following conclusion: “One who is interested in developing and enhancing intrinsic motivation in children, employees, students, etc, should not concentrate on external-control systems such as monetary rewards”

Now that’s quite a statement. Just think about it – commission, for the long term, doesn’t work. Rewarding the kids with money in return for doing those house-hold chores – doesn’t work. He goes on… “When money is used as an external reward for some activity, the subjects lose intrinsic interest for that activity” Rewards can deliver a short-term boost – just like a jolt of caffeine – but the effect wears off – and worse, can reduce long term motivation for a project.

Now here’s an interesting point. That research is over 40 years old and clearly hasn’t changed the way we behave – for the most part – in how sales people are managed in the work place.

The research also implies that if the commission is taken away, people will be demotivated to a level below that at which they started. So, by paying commission in the first place we need to keep paying it – as taking it away will be detrimental. But the effect of paying the commission in the first place only has a short term effect, at best. Over time – and it’s quite a short time – the effect of having a commission scheme wears off.

So, what does motivate people? I suggest you read this book (and also ‘Punished by Rewards mentioned in another posting) for the answers…