Sales;

 

Think twice before piling on cash incentives as a means of motivating your salespeople. "Cash commissions have become such an integral part of sales compensation that they may have lost some of their ability to improve performance," says Jerry McAdams, co-author of a new study commissioned by The American Compensation Association and the American Productivity Center.

Survey respondents reported that such noncash incentives as travel and merchandise motivated just as effectively as cash awards -- at about one-third the cost. Cash incentives cost about 12? for every extra dollar of sales. Noncash incentives cost only 4? for every dollar.

In addition, McAdams notes, noncash incentives have a "trophy value." If you win a new fur coat, you can wear it. It's not so easy to show off a few hundred extra dollars in your paycheck.