4 Tips for Building a Smart Incentive Plan that Serves Your Clients
There’s an old saying that’s certainly true in business: “What gets measured gets done.” If you paid attention to financial news late last year, you saw the fallout from Wells Fargo’s bonus system that led to congressional inquiry, lost shareholder value and ultimately resulted in the resignation of Wells’ CEO. The system Wells Fargo had in place built a culture of high pressure sales and unethical practices – neither of which served the bank’s clients or shareholders.
But this doesn’t mean the idea of motivating employees through financial reward is bad. Incentive plans are still a bedrock practice for many businesses, and there are ways to build them that serve your clients, shareholders and your business, not just individual employees. That’s what we have done at Pinnacle, and you can do it too.
-
Always begin with the end in mind
Your company’s goal should be bigger than simply lifting sales numbers or producing more widgets than last year. What you’re really after is long-term value, whether that be to your clients, shareholders or to yourself and your employees. Any bonus plan should start there: Incentivize the actions that will contribute to the overall long-term value of your company. That’s our focus every day at Pinnacle. -
Service, service, service!
Above all else, your employees should serve clients by providing what they need how they need it. Managers should give employees time to get to know clients thoroughly so they can find out their needs and offer the products or services that will meet them. That way, they can give clients “WOW” moments: distinctive, memorable service that causes a client to say, “WOW, I can’t believe you did that,” or, “WOW, I never expected that!” That’s what Pinnacle does. We work hard to meet clients’ needs, not to sell a credit card simply because it’s the “product of the month.” -
Reward collective effort, not individual actions
A service culture will naturally lead to a healthier bottom line, and that is what should be rewarded through an incentive plan. When clients are well served and the company is making money, shareholders are rewarded and so should be your employees. Their individual contributions help make your company prosperous and ensure its long-term future. So rather than encouraging them to focus on individual performance (see next bullet) and meet a sales quota, help them to see the bigger picture of how what they do leads to more revenue, higher profits and better long-term value. -
Build a team mentality
Your business isn’t made up of a bunch of individuals working in silos. You are all responsible for each other’s success – from the interns all the way up to you as a manager and owner. Once your employees understand that, you are well on your way to working together as a team toward company-wide goals.
At Pinnacle, our incentives are tied to firm-wide performance – period. If the firm hits its goals, which are clearly defined, straightforward and measurable, all of our non-commissioned employees are rewarded. This includes our sales team, back-office associates, human resources team, IT specialists – everyone. If the firm doesn’t meet its goals, no one receives a bonus. That avoids the kind of in-fighting, competition and aggressive sales tactics that don’t take into account what’s actually best for the client and the company’s long-term future. At Pinnacle, this approach means everyone is empowered – and truly desires – to go the extra mile to delight our clients.
Incentive plans are a solid way to drive your business forward if they reward the right behaviors. They can motivate your employees to work as a team to serve clients relentlessly, which can increase the overall long-term value of your company. With careful planning and oversight, you can make sure that increased value will stand the test of time rather than just boosting an occasional quarterly report.
David Bradshaw can be reached at 865-481-7802 or by email at David.Bradshaw@pnfp.com.