"Nothing
can stop the man with the right mental attitude from achieving
his goal; nothing on earth can help the man with the wrong
mental attitude." -- Thomas Jefferson
To
determine your budget, you have to evaluate your expected
results. Provided below are three examples: sales budget,
increased attendance budget, retention budget. These forms
will not yet calculate your budget, but you may fill in
the fields with your information and print out the forms
for your records.
Sales
programs: Research shows that most companies allocate
5-10% of additional (incremental) gross sales during the
program towards the total cost of the incentive program.
Sample:
Sales Quarter Program
A.
What
are the revenues of last year's comparable quarter?
B.
What
is this quarter's expected sales?
C.
What
is your incentive program sales goal?
D.
Estimate
your incremental sales. (Suggestion: Subtract B from
C)
E.
What
percent of your incremental sales generated will you
allocate towards the cost of the incentive program?
(between 5-10% suggested)
F.
What
is your budget for the incentive program? (E% x D =
budget)
G.
What
is your budget for the reward? (80% of your incentive
program budget (F) suggested)
Note: If your budget for the reward must
be split up for the winners, will it be enough
to keep people motivated?
Example: You figure that you will have $80,000
to allocate towards the reward. 20 sales people
meet their quota. Each sales person will receive
an award with the value of $4,000. Will that motivate
them?
To determine the motivational factor of the reward,
answer these questions:
H.
What
is the average salary of your sales force?
I.
What
is the value of the reward per person? (G divided by
the number of people in your team)
J.
The
value of the reward is what percentage of the average
salary?
Note: If the value of J is between
1-5%, it may not be very motivational. If the
value of J is higher than 5%, it is most
likely that your team members will strive for
excellence and work hard to obtain the goal.
Thus, in the example...if their average salary
were $60,000, a $4,000 reward would be between
6 & 7 percent of their salary. People would most
likely work hard for the reward.
