To the system of material motivation: the sin of derived indicators
In the previous publication on this topic were put MOST harmful advice.
Fatal and close to the errors in the construction of the SMMP.
There are also less dangerous mistakes, not mortal, so to speak, sins, which, however, drastically reduce the beneficial effect of the introduction of the SMMP. And, as a rule, still lead to the most unexpected consequences.
The most common among these errors is the desire of developers to rely on derivatives (as opposed to natural) indicators.
Almost always this is a consequence of the “cunning plan”.
For example, we will motivate sellers not on sales (or, there, gross profit) - but on the average bill.
Like let them try, they work out every client by 100%, and together with the average check the sales volume, profit and everything else will multiply.
Alas and oh! The result of such motivation in the medium and long term will be a) an increase in the average check and b) a fall in all other indicators. Or, at least, significantly slower growth than organic growth without the influence of any fashionable motivations.
The main principle of the construction of material motivations (and not only, but we will not spread) - an average person does exactly what he is paid for.
In fact, Karl!
That is why, in particular, the salary systems are so inefficient - for whatever the hapless boss thinks (“I pay grandmas to work for them” ”), the salary is actually paid for the fact that the passenger is on the organization’s staff list. But only.
')
Accordingly, if you pay for the growth of the average check - you will get a grown average check. First of all, through all sorts of more or less innocent frauds on the part of interested personnel - such as arranging several buyers in one check, etc. But what a bona fide manager should really be interested in - sustained profit growth in the long term - will suffer.
Another version of the case with the motivation of sellers to further illustrate the methodology.
Suppose the company's commercial director wants to force sellers to actively seek new customers - such as, the more customers, the more sales will be in the end.
Motivation changes accordingly - for example, only profits on orders issued by new customers (million technology options) are credited.
The reader probably already represents, how will this end in reality? That's right, the “new customers” will become much larger (for old orders they will produce new counterparties in the database), and sales, profits, etc., will not grow at best.
Based on the above, the basic principle of the correct choice of KPI becomes apparent :
as close as possible to the physical indicators that are of interest to shareholders.
It is almost always a) or profit in the case of a stable business, or b) sales are for a business that is strictly oriented to extensive growth.
And it is more difficult for an ordinary employee to get rid of these indicators than with derivative fantasies, such as the number of calls received per hour, average profitability by request, or similar fruits of the miracle administrators' creative rage.
Remember that the most effective material motivation is from a private entrepreneur. How many business has earned, received so much. Income = 100% profit.
The closer the final formula of motivation of a specific employee of your organization to this ideal, the more effect you will get from introducing the SMMP.
PS Alerting objections \ questions - neither profit nor sales are a universal base for KPIs for any employee of the company. For example, in the motivation of the storekeeper, they are not directly applicable for obvious reasons.
However, both profits and sales are only special cases of more general KPIs, which, in turn, are already almost universal and, in the correct interpretation, are effective when applied to the motivation of any employee of the company's line divisions. About this - in the following series.
Fatal and close to the errors in the construction of the SMMP.
There are also less dangerous mistakes, not mortal, so to speak, sins, which, however, drastically reduce the beneficial effect of the introduction of the SMMP. And, as a rule, still lead to the most unexpected consequences.
The most common among these errors is the desire of developers to rely on derivatives (as opposed to natural) indicators.
Almost always this is a consequence of the “cunning plan”.
For example, we will motivate sellers not on sales (or, there, gross profit) - but on the average bill.
Like let them try, they work out every client by 100%, and together with the average check the sales volume, profit and everything else will multiply.
Alas and oh! The result of such motivation in the medium and long term will be a) an increase in the average check and b) a fall in all other indicators. Or, at least, significantly slower growth than organic growth without the influence of any fashionable motivations.
The main principle of the construction of material motivations (and not only, but we will not spread) - an average person does exactly what he is paid for.
In fact, Karl!
That is why, in particular, the salary systems are so inefficient - for whatever the hapless boss thinks (“I pay grandmas to work for them” ”), the salary is actually paid for the fact that the passenger is on the organization’s staff list. But only.
')
Accordingly, if you pay for the growth of the average check - you will get a grown average check. First of all, through all sorts of more or less innocent frauds on the part of interested personnel - such as arranging several buyers in one check, etc. But what a bona fide manager should really be interested in - sustained profit growth in the long term - will suffer.
Another version of the case with the motivation of sellers to further illustrate the methodology.
Suppose the company's commercial director wants to force sellers to actively seek new customers - such as, the more customers, the more sales will be in the end.
Motivation changes accordingly - for example, only profits on orders issued by new customers (million technology options) are credited.
The reader probably already represents, how will this end in reality? That's right, the “new customers” will become much larger (for old orders they will produce new counterparties in the database), and sales, profits, etc., will not grow at best.
Based on the above, the basic principle of the correct choice of KPI becomes apparent :
as close as possible to the physical indicators that are of interest to shareholders.
It is almost always a) or profit in the case of a stable business, or b) sales are for a business that is strictly oriented to extensive growth.
And it is more difficult for an ordinary employee to get rid of these indicators than with derivative fantasies, such as the number of calls received per hour, average profitability by request, or similar fruits of the miracle administrators' creative rage.
Remember that the most effective material motivation is from a private entrepreneur. How many business has earned, received so much. Income = 100% profit.
The closer the final formula of motivation of a specific employee of your organization to this ideal, the more effect you will get from introducing the SMMP.
PS Alerting objections \ questions - neither profit nor sales are a universal base for KPIs for any employee of the company. For example, in the motivation of the storekeeper, they are not directly applicable for obvious reasons.
However, both profits and sales are only special cases of more general KPIs, which, in turn, are already almost universal and, in the correct interpretation, are effective when applied to the motivation of any employee of the company's line divisions. About this - in the following series.
Source: https://habr.com/ru/post/300022/
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