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Companies Embrace Team-Based Sales Incentives to Combat Misdeeds

Wells Fargo isn't the only company reassessing its sales culture in the wake of the fake accounts scandal that ended former CEO John Stumpf's career. Other businesses, too, are questioning the value of traditional selling practices that have typically rewarded individual performance above all else.

A new study shows that American companies are increasingly adding team-based incentives to their compensation structures to curb staff infighting and roguish behavior.

The study of more than 800 companies’ practices between 2010 and 2016, commissioned by Korn Ferry, found a third now include business-unit or divisional performance in their incentive compensation packages. That’s up from 16% in 2010.

Company-wide performance is now a factor in 26% of cases, up from 15% in 2010.

To be sure, applying a more collectively-based pay model has its risks. Star salespeople used to raking in large commissions may well head for the door.

“There’s nothing wrong with cross sell done right.

Indeed, the research found that personal achievement remains highly valued, with 83% of companies still measuring individual performance for compensation purposes. The figure, however, is down nearly 10% from recent years.

“What we are seeing today is a better balance between measuring the success of the organization and the success of the individual,” Korn Ferry practice leader Tom Hill said.

The changes come as business leaders acknowledge that sales is a team effort, Hill said, involving multiple functions such as lead generation, proposal writing, technical support and account management. “Rewarding groups accordingly creates the right behaviors among sales team members, who are working together toward one common goal.”

For its part, Wells Fargo has pledged to shift its sales culture to reward staff for customer service and risk management. Still, current CEO Tim Sloan said the bank also wants to avoid “over-correcting” for the scandal. “There’s nothing wrong with cross sell done right,” he told a recent investor briefing.


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