9 - Tools for controlling decentralized processes: directional objective programs

Summary

A sales force motivation program at American Express

American Express' management considers that team work contributes substantially to the firm's success. The proximity of a sales team with customers, the continuous concern for quality, the constant search for improvements, as well as the importance of every salesperson's commitment are the bases that this firm uses to motivate the sales force. When they succeed in opening a new account, a salesperson gets a bonus on top of commission that is a percentage of the amounts that the new customer deposits during the first six years. In addition, every year, the highest performing salespeople are offered a luxury holiday. In order to fall into this category, the salespersons must have been singled out for some action in which they demonstrated exceptional team spirit.

American Express does not just recognize its top sales producers. The sales managers let their salespeople know that they appreciate good performance and show that the company appreciates even modest successes whenever they occur.

The objective of this American Express incentive program is to bring salespeople's motivation to its highest possible level, to foster a spirit of team work and high morale in the sales force. Contrasting with the type of centralized motivation programs that have been discussed in the preceding chapter, American Express has developed a highly decentralized motivation program that gives salespeople the leeway to select their own performance levels.