I have always been a firm believer and practitioner of creating the right incentives to drive the desired behavior.  It would be nice to rely on your employees to do the right thing for the shareholders but that’s a bonus if that happens so the sure thing to do is to pay for the desired goals and it’s a magical thing to watch what happens.

I recently had a conversation with someone who relayed a story about a senior manager who manipulated the business to maximize income to also maximize the year-end bonus!   There are many examples of this and there are really easy solutions if you create the right plan.

If you want high renewal rates for a subscription business…well pay the people responsible for client retention based on retention.  If you want to exceed targets, create incentives that reward exceptional performance.  If you want to retain key employees, create long-term incentives that reward tenure and the creation of value.

As the expression goes…”You get what you pay for.”

Brick