This month's cover story subject—Daniel Pink—turns many of the beliefs companies have about employee incentives upside down. In my opinion, he's onto something.

Incentives can backfire in so many ways. In their simplest form, they're often the reason consumers are upsold or pushed toward various brands and models when they try to purchase an appliance or a car. Even incentives for nonsales employees—like years-of-service awards—can send the wrong message if they reward lackluster employees for sitting at a desk for a certain number of years and overlook young, hardworking talent.

Poorly designed sales incentives can create conditions where people ignore what's best for the company and the customer, or, in the worst case, act unethically so they can cash in. They also put companies in the position of having to up the ante by creating a more exciting trip year after year. Pink sees this as “a serious issue. If that's the reason the reps are selling—to go to Tahiti instead of Hawaii—that's not the recipe for an effective sales force.”

So why do we keep doing it?

I'm not calling for the end of incentive trips, just a rethinking of them. They need to offer winners a sense of autonomy, mastery, and purpose—the cornerstones of Pink's book.

• Autonomy—For starters, ask your winners what they want. Some companies speak with both qualifiers and incentive winners themselves, so the contest includes an array of awards that appeal to all. Consider individual incentives. If they want free time, make sure there's plenty of it. And listen to your young salespeople, who have different interests and want different activities than your seasoned ones.
• Mastery—Why would you bring so many brilliant people together
on a trip and not focus on idea-sharing? Have them brainstorm on a marketing campaign, or travel to a company factory in another destination
and learn about that operation. Incentive trips need more content, depth,
and purpose.
• Purpose—Take all these incredibly fortunate people and do some good. I am convinced that incentive winners now want to give back when they travel. Even better, find a way to extend the life of your charitable activity beyond the trip.

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