> One counterexample (unfortunately the only one that comes to mind) is sales, where performance has an immediate positive cash & profit impact that is trivial to measure.
Nope!
Two salespeople closing the same total value over a year can have vastly different impacts on the business.
Say Alice cares about how well the customers she brought in are doing. She follows up on their experience every six months. She talks to the people in the organisation who fulfills the customer desires. She makes sure there's a good customer--product fit, and her customers are just at that edge where they challenge the organisation to do better without demanding of them the impossible.
On the other hand, Bob doesn't care about how customers do. He just wants to close deals. He finds bad customer--product fits but convinces them anyway by promising rainbows and daisies. The customer is unhappy from day 1, because they never get what they were lead to expect. The organisation is stressed out trying to fulfill unreasonable demands.
Alice is a net positive contributor, Bob is at best neutral -- both close the same value, remember!
That sales performance measures are easy and instantaneous is one of the most damaging myths governing my current workplace. It's really bad.
Most places I’ve seen have year on year bonuses for sales growth. It doesn’t have be a flat bonus for a given year.
So if Alice finds good customers and retains them, she does better than Bob because that customer is retained and she’s finding new accounts while Bob is trying to find customers to replace the sales he lost this year.
It’s not trivial to develop sales incentive programs, I agree, but it’s way easier than doing it for home office people whose job only has a loose connection to revenue and profit and any measure is inherently subjective.
You are fortunate to have worked in mostly good places! I have seen a lot of sales compensated on commission at contract close. It gets as dysfunctional as one would expect.
I still don't agree it's easier, though. If a customer stays, is it because they've received great support or because the salesperson found a good fit?
What I'm trying to say is "if sales get compensated when a customer sticks around, then so should everyone else supporting that customer".
Basically the only good incentive programme is profit sharing (or ownership) applied across the organisation.
Then again turnover for salespeople is often so fast that just doing 2 'good' years is enough, they move on and the company then needs to find a new salesperson AND new customers.
Nope!
Two salespeople closing the same total value over a year can have vastly different impacts on the business.
Say Alice cares about how well the customers she brought in are doing. She follows up on their experience every six months. She talks to the people in the organisation who fulfills the customer desires. She makes sure there's a good customer--product fit, and her customers are just at that edge where they challenge the organisation to do better without demanding of them the impossible.
On the other hand, Bob doesn't care about how customers do. He just wants to close deals. He finds bad customer--product fits but convinces them anyway by promising rainbows and daisies. The customer is unhappy from day 1, because they never get what they were lead to expect. The organisation is stressed out trying to fulfill unreasonable demands.
Alice is a net positive contributor, Bob is at best neutral -- both close the same value, remember!
That sales performance measures are easy and instantaneous is one of the most damaging myths governing my current workplace. It's really bad.