Incentives for When Natural Disasters Strike
Mother Nature has a way of arriving unexpectedly, crashing around, and leaving chaos in her wake. Just as our everyday lives are affected by nature’s abrupt public appearances, your company plans and policies can be challenged just as unexpectedly, requiring flexibility in the most chaotic times.
One such system that is vulnerable to Mother Nature is your incentive compensation plan. While not all companies feel the need to alter their already finalized plans, others take the initiative to help motivate their employees at a time filled with distractions. The companies below have proven that with quick and thoughtful action, you can adjust your incentive compensation plans so they meet both the needs of your reps and your overall company goals.
Uber makes a change to create a win-win-win
During Hurricane Sandy in 2012, when the New York City subway system closed temporarily, Uber car service experienced a surge in their business as people tried to get around in the storm. In order to motivate more of their self-employed drivers to get on the road, Uber instituted what they called “surge pricing,” a tactic that raises the price per rid in order to pay the drivers higher commissions. But customers weren’t so happy about this policy, and took to Twitter to voice their complaints.
Uber quickly recognized that while getting more drivers out on the road was crucial, it was equally important to maintain their good reputation. So the company normalized the pricing and continued to pay the drivers double until Hurricane Sandy was over. This cost Uber more in dollars of course, but it paid off in public relations—and mitigated the Twitter backlash.
Sprint acted fast to support its team and build morale
In 2005, Hurricane Katrina left millions of people without cell service in the South and obliterated some Sprint stores, leaving employees with literally no workplace. Sprint worked hard to restore service for their customers, while simultaneously making sure the disaster didn’t stop their in-store reps’ paychecks. Even though reps couldn’t make their usual sales to gain commissions, Sprint quickly announced a special SPIF to reward team member loyalty and patience until business was up and running again. This quick thinking disaster relief kept everyone happy, and the PR was worth the price of generosity.
Snack Company doubles wages to feed the need
Whereas the wallets of some industries are hit hard by hurricanes, the salty snacks business booms when clouds roll in. Customers love to stockpile chips when disaster is imminent, so when a hurricane was looming, one snack company decided to overstock store shelves ahead of time to maximize their profit. But they ran into a problem with this plan: their delivery drivers were on salary, and had no real incentive for hustling. To inspire their drivers, the snack company paid double compensation in the days leading up to the storm. The drivers rallied, and customers were at least guaranteed the comfort of salty snacks in a time of crisis.
Inevitably, natural disasters happen. Building in room for flexibility and having an emergency compensation plan in place before a hurricane or other calamity can make the difference in your team’s morale and the public’s perception of your product—and enable you to give back to your community in a time of need.
Learn more about Game The Plan at gametheplan.com.
Top 12 Comp Mistakes: The Bad & The Terrible
Since 2005, Xactly has worked with thousands of customers and managed billions of dollars in incentive compensation. Given this industry experience, we’ve seen companies make the same mistakes over and over again, even with good intentions in mind. Find out the twelve most common compensation mistakes in the latest eBook from Xactly.