We need a tough, but fair way to reward producers and encourage those who can do more.

Walking into a seminar recently, I overheard a woman say, “Oh, but even if our salesmen don’t make the quota, we give them a bonus anyway. After all, they tried. And if we don’t give them the bonus, their morale goes down. And how can you expect a salesman to sell if his morale is low? You gotta keep the sales team fired up!”

I grabbed this woman by the hair and swung her around, her neck twisting like pulled taffy. OK, not really. But I did ask, “You give every salesperson a bonus … no matter how much they sell?”

“Well, yes. It just seems more fair that way.”


Did you ever see the movie Stand and Deliver? It is a based on the true story of a L.A. high school teacher named Jaime Escalante. Mr. Escalante quits his lucrative day job in the computer industry to teach high school math. His students are a tough bunch not much into math.

In fact, the students aren’t much into school. The high school is in danger of losing its accreditation due to poor test scores. One well-meaning teacher suggests that the reason the kids don’t score well on the tests is that the kids are poor. How can you expect them to do as well on tests, and in life, as the 90210 kids?

Mr. Escalante suggests that the teacher isn’t teaching well enough. That’s why the kids aren’t learning. (How’s that for taking responsibility?) He announces that he will start teaching his class calculus. The kids who pass the Advanced Placement (AP) calculus test will receive college credit for taking the course.

The well-meaning teacher shakes her head and warns him, “You are setting those kids up to fail. When they don’t do well on that AP test, they will feel terrible. Whatever self-esteem we’ve managed to develop in them will disappear.”

Mr. Escalante argues that the kids will rise to the level of expectation. When expected to lose, it will be easy for them to lose. What if they are expected to do well? To excel, to succeed? Would they?

Song And Dance: Mr. E pulls out all the stops as a teacher. He teaches the kids to sing and dance the rules of calculus, assigns the too-few chairs in his classroom to the kids who participate and do their homework and makes the others stand in the back of the room. He fuels a burning desire to learn. Good stuff! When the AP tests roll around his students ace the test. All 18 kids pass with flying colors.

So what happens? The kids are accused of cheating. They do well, they pass the college level test, and they are thumped. They have to re-take the exam to demonstrate to those in authority that a bunch of poor, Hispanic kids from L.A. can actually learn calculus.

The kids who didn’t take the test or sign up for calculus weren’t accused of anything. They were expected to be underachievers and they were. They could point to the calculus kids and call them cheaters.

This was a classic case of thumping the achiever and rewarding the underachiever.

Stand and Deliver has a happy ending. The kids take the test again, and they all pass with high scores. They hold their heads up and demand recognition for their win. They demonstrate to other kids that it is OK to be smart and to do well. In 1982, 18 kids in Mr. Escalante’s class passed the AP exam. In 1987, the year the film was made, 87 students took and passed the AP calculus exam. Good, upwardly mobile statistics.

The story makes a few very powerful points:

  • People rise to the level of expectation. Study after study has proven that if you expect greatness, you will probably get it. What do you expect of yourself? Your children? Your employees?
  • People can learn the skills they need to achieve their goals and dreams. Jaime Escalante was a great teacher. The students brought their desire to learn and their willingness to work hard and he showed them how to do the math. What are you teaching? What training are you making available? You need to teach the skills necessary to get the job done.
  • Acknowledge and reward the winners and they will win some more. Each person has the seeds of greatness. There are outstanding people who overcome all obstacles to succeed. These folks will make good no matter the odds. Others need to be encouraged to succeed. They need to taste the reward to learn how fun it can be to score the points, pass the test, make the sale. And they need to understand the consequences of not scoring, passing or selling.

Unfortunately, we Americans are getting good at rewarding poor performance. Note how income tax works. Those who produce, pay. Those who don’t produce get something for nothing. Certainly we need to care for those in our society who cannot care for themselves. But how many folks are unable to contribute in some way? We pay billions in insurance premiums. The only way to benefit from insurance is to get sick, become disabled or die. Production and savings are penalized. Bankrupt-cy is rewarded.

Time and material billing rewards poor performance. The guy who takes longer gets paid more? The fellow who has to run all over town because he is not prepared to do the job gets paid more? Not fair. I always bristle when someone paints a sanctimonious picture of T&M as honest and pure and flat rate as the devil’s pricing method.

My friend, we have it all backwards!

Now, don’t be fooled. When I re-read the columns I write, sometimes I sound so darn smart! But I am struggling with this lesson. Too many times I have just paid the bill when I should have pointed out the lack of quality or performance.

You see, I am basically a nice person. I am generous and kind and giving. But I do everyone a disservice by rewarding poor performance. I contribute to the decline of our civilization.

The gal I met outside the seminar who admitted that she paid her salesmen even when they didn’t perform, she is an absolutely wonderful and loving person. Her intentions are good. But what she is doing is wrong.

Tough, But Fair: At your small shop, you can change the world by instilling a sane and reasonable reward system. Play the game straight. Every position at your company needs a statistic that will measure that position’s performance. If you set up an incentive-based pay system — and I think you should — lay out the rules and play by them. If someone doesn’t hit the mark, well, that’s life. What can you do to help him win next week? What can you teach?

When you give the reward to the person who doesn’t hit the mark, you make that person an accomplice to your crime. You cheat and then involve him. This is not a small thing.

What happens to you when you reward nonproduction? You get resentful. Admit it. In the moment, you justify your actions by saying, “Oh, I cut the guy some slack. He was having a tough week.” Later, when you are having a tough week, you’ll think, “I am always going the extra mile for that guy and he never sells anything!” Really, you are the one who created the inequitable situation, not him.

And what happens to the fellow who does hit the goal and you give equal bonuses across the board? You take the reward away from him. He gets the same consequence as if he didn’t make the goal.

Reward nonproduction and punish production. You’ll get nonproduction. Most folks will play a fair game and have fun doing it. A good person will dust himself off from a bad week and try again the next.

Reward production and you’ll see a lot more of it. Reward those who stand and deliver.