Affordable and Effective Sales Incentive Ideas
Millennial workers are a vital part of U.S. corporate culture. As the largest generation since the baby boom, they will make up 75 percent of the U.S. workforce by 2025. They are already making their presence felt by introducing different ideas about the best ways to work and new sets of workplace values.
Managers are quickly realizing millennials need to be managed and motivated differently than other generations. Retention is one of the top concerns for managers of millennials, according to Bloomberg Businessweek. The publication reported millennials tend to stay about 18 months in jobs with high turnover and three years in other employment settings. They tend to be more willing to leave positions than their counterparts in other generations, which means showing appreciation for the work they do is vital for employee retention. One of the most effective ways to make millennials feel appreciated is through incentive compensation.
What Do Millennials Want?
Millennials prioritize their salaries to a large degree. A survey from Business Insider and News to Live By showed 69 percent of millennial workers place pay as their highest priority when searching for a new job. The Wall Street Journal suggested this emphasis on compensation could be the result of this generation being saddled with high student loan debt, as the average graduate in the class of 2014 will have $33,000 of debt.
As much as they value competitive compensation, however, millennials have other high priorities as well. Many aren’t just driven by the money. Fifty-three percent of millennials said they need meaningful work in their careers, and 43 percent said they need positive relationships with their co-workers. Like all workers, they also want to feel their company appreciates them. Part of this does involve compensation, as 10 percent of millennials said they would leave a job that did not pay enough, or that they would take another offer if it paid better.
Millennials are not alone in these desires. Data from Towers Watson showed only half of employees feel they are fairly compensated for their work compared to others in similar positions. A sentiment also shared by half of the workers surveyed was that their managers fairly reflect performance in their pay decisions.
According to data from PWC, however, incentive compensation doesn’t necessarily need to mean cash. While salary is important, the rewards millennials expect tend to range further than what previous generations wanted. A generous cash bonus may not convey the appropriate message or be as motivating as employers had hoped, for example. Instead, the focus for compensation could be on creating opportunities for millennials to have experiences, whether that means tickets to sports games or a company retreat for high performers. Millennials also value feedback strongly, and find it most meaningful when given as the occasion arises. Something as simple as telling a millennial worker what a good job he or she did as soon as it comes to a manager’s attention could make all the difference.
Sales Incentives & Compensation Plans for Millennials
Incentive compensation for millennials can serve many purposes. The first is to increase base compensation and work toward better retention in that way. This can be effective particularly for sales teams that significantly reward their best people, giving millennials the chance to have a key role in determining what their own compensation looks like. However, any sales incentive program for millennials should balance monetary rewards with other types of sales incentives.
“what we have found is that people differ in how they want to be shown appreciation and encouragement,” Paul White, co-author of The 5 Languages of Appreciation in the Workplace, told Bloomberg Businessweek. “Verbal compliments are meaningful to some. To others, words are cheap and spending time with them is important.”
As discussed above, millennials value recognition and feedback. If this recognition comes in the form of a meaningful reward that is not money, it will still be satisfactory. This could include gift cards, gifts like food and wine or tickets to entertainment or sports events. It may also be as simple as an office-wide email naming the top performers for the quarter – who may then be rewarded with traditional cash bonuses as well. Finding the right balance between cash and other rewards and recognition is important for all sales managers who have millennials on their teams.
Closely tied with incentive compensation for millennials is the ability to give real-time feedback. Whether that highlights areas where a millennial worker shines or where he or she has a chance to grow, it’s necessary to give to have engaged millennial employees. Incentive compensation software can not only drive the right rewards structure for millennials, but also alert managers to how their employees are doing. This is vital in managing millennial employees effectively. Managers of sales teams have many demands requiring their attention and time, so a program that can help them alert to events that require feedback is a tool that will prove invaluable for many. This is especially true of managers who have a very large sales team. Software can help managers provide personal sales incentives and feedback even as they handle a high volume of people and tasks throughout the day.
On a similar note, millennials who are recognized should feel the achievement is special. As the Towers Watson survey showed, some employees feel compensation does not always match the results each worker brings to the company. Making sure only to reward those whose achievements are outstanding will make the workers in question feel special, and it will provide more incentive for the rest of the workforce to attain the same heights of performance.
Millennials in PWC’s research said they found companies that had opportunities for career progression to be the most attractive employers. This suggests rewards may not be as compelling as the chance to advance in the sales team itself. Incentive compensation planning software can help managers to review millennials’ performance records for the possibility of a promotion, or development that could lead to one in the future. This may be the most desirable incentive of all.
