A recent EyeForPharma article entitled “Ignore the Science of Motivation at your Peril” argues that “financial and other extrinsic rewards” don’t boost sales performance. Rather, the expert interviewed for the article said that intrinsic motivators such as autonomy, mastery and purpose drive performance and should be used in place of the standard incentive compensation plans. These concepts have been a part of the sales compensation discussion since Daniel Pink introduced them back in 2009 with his New York Times best-selling behavioral economics book, Drive.
Many of the arguments outlined in the EyeForPharma article are appealing, such as, “focus on culture,” and, “everything that gets talked about is important … the hiring, the management, the coaching.” I wholeheartedly agree that these areas are critical to a well-functioning sales force. In pharma, the first-line manager is possibly the most important role in the sales force. Enabling him to provide on-point coaching, and teaching him how to identify candidates who fit the company’s personality and strategy are two of the most important improvements that a company can make to ensure long-term success.
And, of course, culture is going to be a big part of what any company can accomplish with the marketplace becoming more crowded every day. A strong culture will serve as a guidepost when facing numerous challenges such as limited physician access, increased controls through payers, and competitive launches. However, there are two arguments made in the interview that warrant additional consideration:
- “Reps in the field have enormous autonomy. Do they need carrots with financial incentives? I don’t really think they do.” The challenge with this question is that pharmaceutical reps have much less autonomy than reps in other industries in terms of what they can say and how they can support their customers. In an age of increased compliance concerns and corporate integrity agreements, we need to find ways to motivate within the boundaries of today’s incentive programs. For example, many compliance groups might take issue with motivational programs that incent reps to get creative when demonstrating their products’ value to physicians.
- “The data is overwhelming that, once you have an extrinsic reward for a job that requires some force, then the performance decreases with that role.” For each study highlighted by Daniel Pink, there is a counter study showing that incentives do, indeed, boost performance for higher cognitive tasks. A study published in Performance Improvement Quarterly in 2003 called “The Effects of Incentives on Workplace Performance: A Meta-analytic Review of Research Studies” combs through 45 different studies and concludes that, while it’s true that incentives have a higher impact on manual tasks than on cognitive tasks, incentives do still improve performance on cognitive tasks by an average of 20%. Qualitatively speaking, many sales leaders also feel adamant that incentives are one of their best tools to control where their sales team focuses.
So how can we improve our incentive plans? The answer doesn’t need to be a choice between providing monetary incentives and focusing on culture and increasing reps’ sense of purpose. Instead, the solution lies in doing all of the above. By layering incentives on top of a strong culture and sales force effectiveness program, companies will find that their sales teams are able to exceed goals and drive overall company performance.