According to DCR Strategies, organizations with higher than average employee engagement experience 27% higher profits, 50% higher sales, 50% customer loyalty levels and 38% above average productivity. The same report showed that companies that use a tangible sales incentive program experienced three times the revenue over companies that don’t use an additional incentive to salary.
When it comes to increasing sales productivity, where is it more important for companies to invest: employee engagement programs or rewards programs? Here we’ll discuss the secret to higher sales productivity; is it employee engagement or rewards.
Employee Engagement Programs
According to Workplace Research Foundation, companies with engaged employees report higher productivity, higher customer loyalty and increased sales (repeat business and referrals). There’s obviously a clear link between employee engagement and company success.
Implementing employee engagement programs that recognize a job well done and provide employees with learning and development opportunities result in a more motivated workforce who are willing to go above and beyond and could be the secret to a sales team’s success. Engaged employees are 2.5 times more likely to stay at work late, twice as likely to help someone at work without being asked and more than three times as likely to do something good for the company that is not expected of them. Moreover, the research shows that companies whose financial performance is above average report that ¾ of employees are moderately or highly engaged.
Investing in employee engagement that goes beyond rewards is clearly important, especially as millennials begin to make up a larger percentage of the workforce. According to Execu-search, 76% of this generation think professional development opportunities are one of the most important elements of company culture. They also care about Corporate Social Responsibility and the opportunity to give back. Indeed,
81% of millennials expect companies to publicly pledge to be good corporate citizens.
Add to this the fact that all too often, sales commission programs disincentivize reps when they feel their quotas and targets are unattainable. If you are offering a commission or bonus based rewards program that seems competitive but productivity is still sluggish, the secret to higher sales productivity could be an employee engagement program.
Investing in an employee engagement program that offers your staff recognition, opportunities for growth and community investment undoubtedly improves productivity in the workplace. But can all this take the place of financial rewards? The answer, in short, is no.
Despite all the benefits of engagement programs, money and competitive salaries/commissions matter. In a study published earlier this year, the top contributor to employee burnout was found to be unfair compensation at 41%. And back to those millennials again, 67% reported that their financial stress hinders their focus and productivity at work. Most employees agree (in fact, 88% of them) that it’s important that employers reward them for great work.
When it comes specifically to sales, a 2010 study by the Harvard Business School found clear evidence that bonuses enhance productivity; that overachievement commissions sustain the productivity of top performers; and that frequent quarterly bonuses tied to quotas keep sales teams on track to achieve their annual quota.
In summary, both employee engagement and rewards programs can increase productivity. When it comes to sales however, the secret to higher sales is probably not one or the other alone, but a combination of both.