Sales incentive plans are tricky. Make them too long (like annual) and you run the risk of reps who give up in the 4th quarter and sandbag sales for the next year. Make it too short (monthly) and you make it difficult for someone to take a week off without losing out on their bonus. Monthly also puts a burden on accounting. Quarterly can be the best option. Long enough that a week off is recoverable and not so long that they risk losing momentum.
In addition to when an incentive is paid out what the incentive is based on matters. Team goals can drive a stronger team environment but it can also create issues if some on the team are perceived as not keeping up their end of the team’s goal. It is also harder for newer employees to meet their goal making it difficult for them to find their rhythm and fearing that the more seasoned reps resent them. Individual goals can be motivating but may create a lack of sharing of tribal knowledge or success stories as individuals focus on themselves instead of the team. A combination of the two may be best. Individual goals based on where the rep is in his role (seasoned vs. new) plus a combined team piece that may be on something other than just sales numbers. For example, bringing new accounts, selling a new product or service to existing customers.
I once managed a team that had both individual goals as well as a team goal. One individual had not made her goal for the quarter and so stayed at her desk calling on the afternoon of the company holiday party in order to make her goal. The rest of the team voluntarily stayed behind as well as a sign of solidarity to encourage her and provide the energy in the room that was created when all where engaged with dialing. That’s the sign of a great team. How can we create that in your team?