Dave Wiegand, president of Advanced Network Design Inc. (AND), a La Mirada, Calif., telecommunications company, used to get employees to do what he wanted by using an old standby -- incentives. AND had weekly, monthly, and quarterly awards workers could earn. The carrots worked but with a hitch. "We'd start a program to motivate a certain behavior," he recalls. "When we stopped a program, we'd lose that behavior."
So in 1988 Wiegand started a new award system: no system. Now his employees don't know who will get bonuses or what they will be. "Out of the blue we'll call a meeting and reward somebody for outstanding performance," says Wiegand, who gave 15 awards worth some $9,000 at two meetings last year.
The size of the reward depends on the profitability of the activity being rewarded. Last year Wiegand gave a five-day family vacation to Disney World to one executive because his department's sales had exceeded expectations by 70%; a $75 clock radio to an unusually dependable receptionist; and a $375 suit to a manager (with pearl jewelry for his wife) who had increased his department's revenues 40% in four months.
Intermittent reinforcement, says Wiegand, is far more effective than defined bonus plans. Under the new system AND's sales force has shrunk from 12 to 4 while productivity has increased. Where the top salespeople had generated $110,000 in annual new revenues, the two top saleswomen brought in $638,000 and $520,000 in new revenues last year. Plus, the company isn't locked into the fixed cost of a traditional incentive program. -- Ellyn E. Spragins* * *