We have 12 sales staff that compete in a quarterly competition for hefty cash rewards and foreign trips. Unfortunately, this has resulted in conflict among them. One possible cause is that they’re allowed to use underhanded sales tactics like buying confidential information from competitors. Some do not hesitate to resort to bribing customers using their own money. Some “ethical” sales people are complaining about these practices. How do we resolve this matter? — White Rabbit.
This is the downside to offering lucrative rewards for individual performance, rather than rewarding team performance. It will be difficult to shift to a new incentive structure when revenue has come to depend on such a system of rewards.
Everything boils down to the beliefs of top management, as reflected in the company’s mission, vision and values (MVV) system. How sincere have you been in practicing them? If you turn a blind eye to bribing customers, it certainly reflects on the company’s ethics and integrity.
Even if “ethics” or “integrity” are not carved in stone in your MVV, you cannot simply dismiss any unethical practices as being to the benefit of the organization. Bribing customers and buying competitors’ trade secrets can’t be justified. Sooner or later, such extreme sales tactics could condition your managers and employees to the point where they would not hesitate in cheating the customer of bribing a government official in pursuit of company objectives.
If that happens, you will need to ask yourself — is it worth it?
In all cases, the answer is “no.” For one, you can’t ignore the complaints of the “ethical” sales people who oppose such practices. You must put an end to these unsavory practices by reviewing your policy and sending the signal that management will not tolerate such methods. You must argue strongly for ethics in sales and persuade everyone to accept the changes.
TWIN SOLUTIONSIf extreme sales tactics have been practiced for some time, say for more than three years, you can’t ban them without a compelling reason. You need to convince everyone to support change. Top management must be first in reinforcing the desired behavior. Consider the following steps:
One, take an objective, hard look of the rewards policy. Consider the overall rewards system for all types of employees, sales and non-sales alike. Is it possible to increase revenue without resorting to incentives? Would it be possible to offer competitive pay while requiring sales people to achieve hefty quotas?
Corollary to this, do you have the option to terminate non-performing sales personnel as soon as they become deadwood, say for two consecutive months?
If you need sales to be high, is it possible to reward workers who can hit their quotas while remaining ethical? Note the example of San Miguel Corp., which has “profit with honor” enshrined in its values, as cited below:
“We do what is right. We believe in profit with honor. For us, this simply means doing what we’ll say we’ll do and acting with honesty, fairness and integrity.”
You can’t go wrong by acting with honesty, fairness and integrity. Even if you don’t have it in your MVV, it’s not an excuse to do the opposite.
Last, emphasize the importance of integrity. And that all high work performance will only be rewarded if it doesn’t violate the “profit with honor” principle. Inform all sales personnel of the policy change.
Make it clear that personal integrity will be rewarded. Arrange with the human resources department to provide training support for all managers and workers, regardless of the nature of their job and title.
To make the training worthwhile, arrange for a hybrid of online and face-to-face interaction. Allow them to practice their lessons in actual job situations with the help of other employees. For this purpose, you may need the help of line supervisors and managers who can provide after-class coaching, while offering observations as the staff put their lessons into practice.
REASONABLE REWARDSRegardless of their job, workers will do what they have to do to achieve their targets while adhering to the MVV. As part of management, it’s up to you to open the door to meaningful change via training and a reasonable reward and recognition system.
It’s imperative to lend as much support as you can. Be a friend to all and encourage other employees to do the same. Once again, your best guidance is the MVV. Take it to heart. Internalize the principles in letter and in spirit. You can’t go wrong with that.