Why Are You Hitting Yourself?

Updated: Aug 18, 2021

Anyone with an older sibling will instantly recognize the question in the title and remember their hand flailing unwillingly against their body. This memory is one of the best examples I give when trying to explain competition and cooperation to business leaders. Too often, they have established policies that result in self-inflicted wounds.

Many sales departments believe individual commissions are motivating, and they are correct. However, individual commissions foster competition between salespeople instead of cooperation. I have seen these result in theft of sales credit, sabotage of other salespeople causing the business to lose sales and outright fraud against the company. A group of employees is hired to work towards a common goal, but often leaders will implement incentives that reward competition instead of cooperation. When employees are competing against each other, they are competing against the business too.

It is natural to want to reward the best salesperson. It is also natural to recognize an "Employee of the Month." Unfortunately, these programs will undermine cooperation and often lead to demotivated employees willing to sabotage the business and each other. To owners who wish to reward the best salesperson, I have to ask whether they only want one Michael Jordan or a team of Jordans? Even a team of average players will consistently beat Michael Jordan every game. The same thing happens when you have one Michael Jordan playing with four average players who are undermining his efforts. When you play a team sport, you have to build teams. When you have a sales staff, you have to foster teamwork. 

For instance, at one client we changed individual commissions to be instead based on hourly store sales. Everyone shared in the store's success for each hour of the day they were working. There was some initial grumbling, and the top salesperson left soon after that. As it happened, the top salesperson's exit opened the door for the rest of the staff to realize they could start earning more money for the first time. They started working together to make more sales. The best staff members sought the busiest store hours so they could make the most money, and the store needed the best staffers during those hours. The worst staff members were moved to less productive hours or left the company. New staffers were trained during the least busy hours and had the incentive to become better. Within six months of the change, the store was selling more than it had in its history. The last time I checked in, they were examing other areas they could improve to foster better teamwork. Employees, customers, and business owners were all happier. Win-win-win.

In what areas are you competing against yourself?