Rewards Run Amuck: Contests That Demotivate and Destroy the Culture

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May 29, 2015

“We’re adding a little something to this month’s sales contest. As you all know, first prize is a Cadillac El Dorado. Anybody wanna see second prize? Second prize is a set of steak knives. Third prize is … you’re fired.”

In the 1992 film Glengarry Glen Ross, Blake — famously portrayed by Alec Baldwin (and you can see it below) — issues this decree, exposing an artful display of insult and injury in the guise of a motivational speech to the troops.

Many who’ve seen this film probably think this scenario is as far-fetched as Jurrasic World.

Those, like myself, who’ve experienced a high pressure sales environment know it’s as real as the air we breathe, and it’s a lot more terrifying than any fiction writer could possibly imagine.

A cultural mindset that continues to hang on

Sadly, the old school Glengarry Glen Ross cultural mindset (see the video clip above) is not extinct; in fact, it’s still very much alive.

Though they may not have a commander like Blake, there are still many companies that try to incentivize performance by staging periodic contests that essentially pit one employee against the other. This approach always leaves a few employees feeling like winners, while the majority are left feeling like losers.

Worst Practice: A culture that loses its winners 

Beth, a longtime friend of mine, is a sales rep for a large pharmaceutical company. She lives in Boulder, Colorado and covers a five state territory.

Like most competitors in this industry, Beth’s company promotes an annual Winner’s Circle incentive trip to an exotic destination for the Top 5 producers among a staff of 48 sales reps in her division. The rules and metrics of the competition change slightly from year to year, but it’s based primarily on exceeding a sales quota determined somewhat arbitrarily by the VP of Sales in the corporate office in Chicago.

As you might imagine, Beth spends a great portion of her time traveling to and from accounts — from Omaha to Salt Lake, and from Albuquerque to Casper. The sales rep that beat her out for the fifth and final spot this past year covers only the Dallas/Fort Worth metropolitan area.

To add insult to injury, Beth exceeded her pre-established quota by more than $220,000, but still lost out on the all-expense paid trip to the Grand Caymans because her counterpart in Dallas beat his much lower quota by a mere $317 more than Beth exceeded her’s.

Best Practice: A culture that inspires everyone to win

A neighbor of mine, Tony, sells windows and siding for a large big box retailer. His company’s incentive trip is set up with a completely different, new school mindset.

Every sales rep in his company whose annual sales exceed $1 million gets to go on an all expense paid luxury cruise tabbed “The Million Dollar Boat.” There’s no fluctuating quota established by some wizard hiding behind the company curtain. Rather, this is a very transparent and defined sales goal.

Granted, it’s not easy to get on that boat, but any third-grader could understand the rules.

And, there are no managerial politics involved in deciding who goes. Tony has been on this trip five years in a row and he says it’s one reason he loves his job and has no desire to work anywhere else.

Culture: A small word that makes a world of difference

When Tony has an idea or learns a technique that helps him increase his sales, he eagerly shares it with all his associates. After all, Tony wants all of his co-workers to “win” and get on the boat with him; e.g. “the more, the merrier!” His company fosters a culture of collaboration and celebration that inspires everyone to work harder, perform better, and stay longer.

When Beth has an idea or learns a technique that helps her increase her sales, she’s motivated to keep it a secret. After all, why would she want to help a co-worker increase their sales if it puts them in the Winner’s Circle and leaves her out? For the second year in a row, Beth had a record-breaking year and was her company’s sixth (6th) top producing sales rep — and she didn’t even get a set of steak knives.

Did this result motivate Beth to work harder next year?

Hardly. It did, however, motivate her to begin circulating her resume’ and start returning the multitude of calls she’s been getting from headhunters.

This was originally published on Eric Chester’s blog Chester on Point. Eric’s new book, On Fire at Work: How Great Companies Ignite Passion in Their People Without Burning Them Out, is available October 2015.

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