MAKE SURE INCENTIVES ARE JUST THAT
Incentives are designed to motivate salespeople to increase and improve production; however, you should exercise caution when implementing an incentive program.
What management considers to be an incentive might not be perceived as such by producers. It might be a barrier.
In one such case, an agency in Vermont established a producer-incentive contest based on dollar increases of commission income. After a few weeks, only two of the 10 producers were online or increasing production. After a review of the program, it was determined that the dollar increases were set too high. As a result, management lowered the growth figures.
Unfortunately, by that time, two things had happened. First, the best producers (the two meeting the original goal) readjusted to meet the revised goal; therefore, their production decreased. The other producers who had not met the original goal had been shamed. They saw that the goal had been lowered for them. The message they heard was, 'Oops, sorry, we should have known you couldn't meet those figures. After all, you're just average producers.'
In order to have a fair contest/program for every producer, set a goal for each category: Veteran, novice, beginner. For example, set a percentage increase for each producer, then measure and post the percentage attainment each week.
Before executing any incentive program, obtain input from the sales force. No one enters a contest they don't support. If contests are forced on individuals, they'll prove they entered with a goal to fail.
In like fashion, involve agency owners. Be certain they are involved, especially in the recognition part of the program.
Incentive programs, if conducted correctly, will also produce another benefit: Increased production above the stated goal. Do not place a cap on production. Don't give it a declining valuation; rather, give it an accelerated value.