Expensive Trips for High Performers - Ditch Them Even if Someone Else Is Paying?

Most folks agree that in the middle of a recession and with the stinky reputation investment banks have garnered for all-expense junkets lately, incentive trips costing a company hundreds of thousand of dollars are a bad idea.  After all, how could you spend all that money while so many people are hurting in today's economy?

Of course, it's never that simple.  If it were simple, everyone could agree.

For example, here's the toughest question regarding travel rewards from my perspective as a VP of HR.  What do you do with "somewhat extravagant" reward trips for high performers when someone else is paying? (a company whose products you sell and needs access to your sales force, etc.)

Paul Hebert weighs in with his view, and remember, he's a rewards and incentive expert:

"The biggest misconception that is being propagated in the news is that these "junkets" are only for the top executives within a company.  I'm guessing the public has visions of fat, half-naked old men, sitting on pillows with young ladies dropping grapes in their mouths.  Nothing could be further from the truth. 

Most incentive participants are:

• The rank and file sales person whose job depends on ever-increasing levels of performance and contains risk most of us desk-jockeys couldn't imagine.  (Do you want your continued employment predicated on your prospect being in a bad mood after spilling hot coffee on his/her lap in the Starbucks drive-thru?)
• Employees who have exceeded, by a wide margin, the constraints of their job description and have increased the competitiveness of their company
• Members of a company's distribution channel who have stuck with the company to become top producers and advocates for the product, service, brand or company - people the company needs to remain competitive and innovative.
• The spouses, children, significant others, who attend with the person who earned the trip - providing much needed reward for the sacrifices they have made to allow the earner the time and attention being one of the best requires.

Incentive and meeting travel is a critical element in building relationships - especially in this predominately electronically connected world.  These relationships will help companies weather this economic storm, create new business ideas from collaborative conversations, foster innovations that will drive business, and reduce the costs of turnover within organizations.

Do not perpetuate the false information that is filling the airwaves, newsprint and electrons." 

Paul raises some good points related to travel rewards.  Travel rewards most commonly go to PRODUCERS - the sales pros who bring home the bacon, so the company can fry it up in the pan.  And if there's a group out there you want to keep motivated, it's the sales force.

So, why not continue rewards travel for that group, especially if someone else is buying, or the funding comes from the difference in revenue once a sales rep goes over 100% quota against an already aggressive plan?  The counter to this view is the employee relations cost.  After all, the regular folks don't get access to the quota spreadsheet, and they don't know if an affiliate/channel partner is paying for the outing.

They just see the trip, the cost and the brand of the hotel, which decidedly did not find your top sales performers staying at a Holiday Inn Express during the last junket.  With that in mind, my call would be to shelf the extravagant trips for 2009 company-wide, regardless of who pays or how critical the trip is said to be to sales force morale. 

After all, like the saying goes - salespeople can give themselves a raise by selling more.  Most of our employees who see the extravagant trip can't perform their way into being included on the junket, and it stings to see the trip going off as planned when they lost 2 people from their 8 person department last Friday.

Lose the junket for 2009.  I'm betting you won't lose your top sales performers. 

Comments

[Paul Hebert]

Hoisted by my own petard!

I get where you're coming from Kris. It is a tough line. I do think that sale in particular, have a much more binary job metric - success/failure - versus the other employee groups. They have much more at risk than the majority of employees in that their performance is transparent and actionable to a much greater degree. With that risk should come some rewards.

True that sales people can give themselves a raise by selling more but two things come into play - income adjustment - meaning once I hit a certain level I'm happy with the work/commission trade off and will stop really going for more. Second, in most cases the award has much higher perceived value and actually costs the company less money than the associated commissions/monetary awards that would be required to get the same performance - so you're doing the company a favor with the award.

One thing I could recommend is to work with whomever is providing the incentive - remember they only care about one thing - selling more of their stuff - can you negotiate a deal where they provide a lower level travel award and other money/award for support teams that help sales people. Most suppliers want a great relationships across the employee base - not just with the sales people.

Also, once gone - just try to get the budget back. Very difficult.

[John]

Scrap the trips, how about a bowling night for all the team.

It's a lot cheaper and certainly more rewarding from a team building perspective.

[Kris Dunn]

Paul - good points. Not sure you're accurately considering the impact the visibility of the trips has on others from an employee relations standpoint, but that's OK - that's not what you do.

If there's one group you have to keep pumping up, it's the sales force...

KD