Last year, 64% of workers felt obligated to participate in post-work functions, with more than half resorting to excuses to skip or leave the event early. Dubbed “the happy hour killer,” Gen Zers are known for prioritizing a healthy work-life balance. As this demographic is projected to comprise 58% of the workforce by 2030, organizations must reassess their approaches to employee incentivization now. This translates to an urgency of change for sales leaders who traditionally lean on the President’s Club model, an annual performance goal set by companies to recognize their best-performing salespeople. Under this framework, top achievers historically are rewarded with an all-expenses-paid vacation to an exotic destination.
However, this emerging generation of sales professionals may not find allure in group vacations with colleagues as a reward. Consequently, savvy sales leaders must reevaluate their incentivization structure, shifting away from prioritizing work-related events and instead focusing on motivating reps with incentives aligned with their individual preferences and priorities.
Understand Gen Z Behaviors To Tailor Incentive Compensation
In today’s world, incentivizing sales professionals effectively requires a mix of financial rewards, recognition, non-monetary incentives and a supportive work environment. Some modern and effective incentivization strategies include:
Performance-Based Bonuses & Commissions
A tiered commission structure can be set to ensure sales teams continually create new sales goals as they achieve current ones. When they exceed these goals, sales leaders can grant quarterly or annual bonuses based on these benchmarks. These objectives can be on an individual or a team basis, where they work on surpassing a collective target together, which can foster collaboration.
Non-Monetary Incentives
Outside of the President’s Club model, non-monetary rewards can be effective on their own. Experienced-based rewards, such as travel opportunities and event tickets, would be well-received if rewarded individually. Additionally, sales leaders should publicly recognize their most successful salespeople through programs such as “Employee of the Month” during town hall meetings or through company-wide email blasts.
Health & Wellness
A recent study found that 56% of Gen Z consumers in the U.S. say fitness is a “very high priority,” compared with 40% of US consumers. Wellness program incentives, like gifting gym memberships or health coaching, would resonate well with the next generation of salespeople. With 20% of Gen Z more willing to talk about mental health than their older counterparts, mental health counseling services and stress management programs are also great incentives to offer.
Analyze Data To Implement Effective Incentive Programs
These strategies help create a motivating and fulfilling environment for sales professionals, driving individual and organizational success. Regarding this compensation, sales leaders and professionals can ensure success by overseeing these rewards through incentive compensation management (ICM) software.
ICM software consolidates sales and employee data, streamlining the calculation of commissions. Effective incentive compensation programs help sales representatives focus on their performance, encouraging them to manage leads and close deals. Accurate and transparent ICM software motivates sales personnel, retains vital staff and enhances sales performance. Interactive dashboards where individuals can create plans, rate tables, quotas and highlight sales opportunities help sales leaders inspire and drive their teams to meet and exceed targets.
Additionally, ICM software allows organizations to efficiently and accurately compensate top performers while enabling sales representatives to manage and monitor their individual sales goals in real-time. The software can show sales reps exactly how their commissions break down with unrestricted clarity. This transparency builds trust so sales teams can focus on selling, not double-checking commissions.
Ensure Incentives Meet Modern Workforce Needs
As the workforce evolves with a growing presence of Gen Z, companies must rethink traditional incentivization methods to stay relevant and practical. This shift is especially critical for sales leaders who have historically relied on models that will no longer be effective. Modern strategies that blend financial rewards, personalized non-monetary incentives and wellness-focused benefits are essential to appeal to the values and preferences of younger sales professionals.
Implementing ICM software can enhance these efforts by providing a transparent, efficient and motivating platform for managing commissions and performance metrics. By embracing these contemporary approaches, organizations can foster a motivated, high-performing sales force that drives individual and collective success.
Bayley Fesler is the Director of Revenue Operations at Xactly, a provider of sales performance management solutions.
