Quotas are a bad idea

Do you set quotas for your employees? Most industries do use them to a certain extent. Its a great way to let employees know what is expected of them, right? And if they don’t hit quotas we know why these employees are failing, right? Wrong.

Quotas only work to motivate employees to reach a level just above failure. They hit their quota and their done. How many employees will far exceed their quotas? Very few. So if not quotas, then what?

The best way to motivate employees is to train them properly and make them feel as if they are a valued part of the company. Nothing motivates someone more than an intrinsic feeling of importance. A feeling that they are doing something that is of value. Something that counts. Don’t believe me? There are numerous studies that show this to be true.

This video explains it better than I ever could. Its about 18 minutes long but well worth your time.

The Science of Motivation

Relationship versus transactional

I heard a great discussion on the Rob Black radio show yesterday about relationship versus transactional businesses. The gist of if was this. Know which one your business is and operate things accordingly. How do you know which one you are? Here are some guidelines:

Relationship
You rely heavily on word of mouth business.
You see your customers on a regular basis.
You know things about your customers outside of what they purchase from you.
You take the time to make sure your customer gets what they need.
Discounts don’t usually drive more business.
You use the term “client.”

Transcational
Your focus is on getting the sale processed quickly and accurately.
You focus on giving the customer what they ask for not what they need.
Discounts increase the volume of orders.
You use the term “order” and the term “customer.”
You know little about your customer outside of what they purchase from you.

These are just some of the indicators of Relationship versus Transactional. Both of these models work if done correctly. The key is to know which one you are and market your business accordingly. I will go into the marketing aspect of each in future posts.