The 100 club and other incentives

Whether you’re an early-stage play or a large corporate, incentivising your staff will be vital for the success of your business.

Whether you’re an early-stage play or a large corporate, incentivising your staff will be vital for the success of your business.

Whether you’re an early-stage play or a large corporate, incentivising your staff will be vital for the success of your business.

In my late twenties I worked for a number of American companies, latterly as a marketing director. 

Back in the early 1980s, US companies were renowned for their incentive packages to top performing salesmen. These included traditional tools such as option packages (hardly ever offered by UK companies), ratcheted commission structures with very high rates after key thresholds were reached, and the ubiquitous “100 club” for the best salesmen. 

Now the 100 club, or whatever name is appropriate, opens its doors only to the top-performing ten per cent of the workforce. For it to work, it has to be transparent, so there are absolute sales targets, not ‘soft’ performance criteria. You can top it off with an exotic location, where wives and girlfriends are invited to add extra spice, and there you have it – the ultimate in hedonistic, egotistical and dog-eat-dog capitalism!

The problem is that these incentives are expensive to run, easily copied by competitors and nowadays, on the whole, considered to be dated. But some of the things about these jamborees were good and used properly, especially for early-stage, fast growing companies, can be a powerful tool to get thee best out of your employees. Here’s how.

The concept of providing an incentive scheme that includes wives or partners is still as strong an incentive as it was then. So don’t make it a big ‘once a year thing’, but a series of events. So, for example, a monthly competition based on some sales target where you send top performers to Paris with their partner is not expensive, but can be a great motivator. 

Incidentally, don’t try and be too clever – the incentive must be easy to administer and understand. 

Don’t just stop at your salesforce, but include support, consultants, R&D and accounts. So the person who has had a great month on debt collections can just as effectively be incentivised as your front line salesman (in these markets collecting debts is becoming an increasingly important part of anyone’s business).

Try and put your incentive schemes on top of your traditional bonus or salary structures and be innovative. Remember, status is important for all of us so an award for top customer support person might just be a plaque and a dinner out for the team. Not expensive, but motivating, transparent and important for people who are often doing fairly mundane, so-called second line jobs. 

I have dwelt on the 100 club incentive concept and how this might be adapted for small early-stage companies, but let me now mention some other methods that can work. 

I like the idea of trying to get everyone in the company involved. So a suggestion box prize of some sort can really work. I also like well-structured cross-selling schemes where one part of the organisation passes qualified leads to another, and where real money changes hands. So £100 or so for a qualified lead, rising to more if a sale is closed, is a really good way of getting cross-selling to work. And you would be surprised how many opportunities there are that you don’t think of at first sight.

More traditionally, tax efficient option schemes are still a great way to incentivise people particularly where the company is growing fast – with great prospects – but low on cash.

As with my other proposals, try and be innovative. Make the options to be earned transparent by using real targets based on things that the individual concerned can really influence – not traditional targets such as company sales and profits where the people concerned are not really able to measure their own contribution to the company overall target.

The chaos seen over the past 12 months at investment banks demonstrates that, if you create disproportionate bonuses and incentives based on short-term gains, then judgement goes out the window.

And that’s just bad business.


Michael Jackson

Michael founded Elderstreet Investments in 1990 and is its exec chairman. He was also chairman of Sage, the FTSE-100 accounting software group, until 2006. He is a specialist in raising finance and investing...

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