Management by Competition - The Crucible of Compensation

4 min read

Let's talk compensation plans. Specifically, let's talk competition, and how infusing your compensation plans with a little friendly rivalry can drive results. If we parse out this element of human nature, and learn to leverage our natural love for challenge and advancement, we can take our incentive compensation plans from the realm of mere mortals into the pantheon of eternal plans.


Infusing your designs with a competitive element is a surefire way to engage people across the board; for millennia people have been inventing new games and then challenging their peers and neighbors to play them. This competitive flair is coded into us, and such designs are already leveraged in your Sales and Support departments – so why not make this a universal application? Each rep has a quota to make, but what about the reps that make it there first - or who are able to double their number? Competitive compensation will give you a better understanding of what your reps are capable of, and inspire them to strive for more and better the next quarter.


Now, pro tip: everyone works differently, and competition is not going to be a cure-all for each employee in your workforce. You don’t want to create an aggressive culture where camaraderie is sacrificed in favor of combative interactions, so play this one smart. The goal here is not to pit your employees against each other to their detriment, but to set them along the same path towards collaborative achievement. Reward the top team in addition to the top rep, recognize and reward the rep who helped their peers the most - no play is made alone, and if you can learn to play up these rep synergies, you will realize growth like never before.


Your reps will be vying for victory, and you want that to encourage performance and growth, but support roles are just as important as hunters, so create a system that rewards rather than punishes. Find ways to compensate your key farmers with SPIFs specific to their functionality, and save the competition for team members ready to compete for glory. The reward and recognition from that should be an added bonus, with participation at the traditional level rewarded in kind.


The point here, as with all of these suggestions, is to think creatively – what would motivate you? What might grab your attention in a job listing, what systems could pull you away from your last company to investigate? You want to design plans that are great for their best practices, but incredible for their ingenuity and creativity. Once you have an established baseline, make sure you have the insights to take your system to the next level. Experiment with the parameters, study your workforce for strategy, and create systems that excite and delight. There is so much potential bubbling within these programs that it would be a shame to allow it to go un-utilized. Build your baseline, find your spark, and let your workforce shine.