The Psychology of Incentives and Motivation

incentives-motivationWe live in a culture driven by fame and fortune. It seems like everybody wants to be either famous or rich or both. And most of us believe that we can--with hard work and a little luck--achieve anything we decide to do. This is especially true for the sales persona. Successful incentive programs begin with an understanding of the people who work in a culture of high visibility, accountability and short term gratification where risks and rewards are counted and posted and where stardom is expected.

For most salespeople and sales managers, public acknowledgement of individual achievement is a very strong motivator because it calls out and puts the spotlight on the individual who is “the best.”

Finding the right reward for being the best is the holy grail of incentive programming. We have instant gratification at our fingertips in many aspects of our lives. So a program designed to change or direct behavior has to account for what we already have and layer onto it what we want, what we aspire to and what we will prize both in terms of physical and mental rewards. At the same time, a reward structure has to assume that participants are creative, adaptable and motivated individuals capable of remarkable achievements.

To some extent, psycho-demographics rule. Behavior is generally predicated on education, income, social class, ethnicity and past experience. Birth order, early childhood experiences, age, life stage, culture and self-definition also factor in how we see ourselves and into what drives us. And while there might be differences in motivating Baby Boomers versus Generations X and Y, age, life stage and short-term needs play significant roles for everyone.

Incentives clearly drive results but they work only when participants validate the program design by asking themselves three critical “expectancy” questions:

  1. Do I value the rewards offered?
  2. Can I realistically achieve the desired performance?
  3. Is the reward worthy of my performance?

Underlying and influencing this “what’s-in-it-for-me” calculus are broader perceptions about the equity of incentives to all participants, the trade-off value of doing something new or different compared to the expected reward and the emotional involvement of program participants. Everyone wants something that’s beyond their reach, budget or scope of control, so we are programmed to invest ourselves to do things differently to achieve a desired result.


01. Understanding Channel management Managing a winning channel incentive program is challenging and requires patience. Find out what the building blocks of a successful program are.
02. Do Channel Incentive Programs Pay Off? Learn how channel programs can help you make the most out of your partnerships and yield lucrative ROIs
03. Channel Incentive Program Objectives and Applications Learn how your program goals and objectives will define your program design and guide you along the way.
04. Channel Incentive Program Application Examples These case studies showcase how companies are successfully using channel incentive programs.
05. The Psychology of Incentives and Motivation Get to know your audience and how do you go about designing a program that speaks to participants’ values?
06. Cash vs. Non-Cash Incentives Cash always seems like an attractive reward. But does it carry the same long-lasting trophy value?
07. Points-Based Incentive Programs Why choose a points-based program? It allows for a flexible structure, and, most importantly, it is measurable.
08. Point Program Participant Segments / Personas After enrolling in a program, participants assume different personas. Explore the various persona types.
09. Incentive Program Study and Benchmarks Compare your initiative program with industry benchmarks.
10. Incentive Program Performance Indicators A look at channel incentive program KPIs and redemption rates.
11. Channel Incentive Program Best Practices A list of best practices that will aid you in launching and maintaining a successful program.
12. Program Considerations and Conclusions Before embarking on a program take these final considerations into account.