February 22, 2018

What Sales Reps Say About Incentive Compensation and What They Mean

E. Norriton, Penn. Feb. 22, 2018. Pharmaceutical sales representatives say they prefer rewards in cash, according to most surveys. The Incentive Compensation (IC) Solution at TGaS® Advisors, a benchmarking and advisory services firm for the biopharmaceutical industry, wondered whether that was actually the case.

TGaS took a closer look at their IC Benchmark data and issued an Advisory Brief on the surprising results: “Never Ignore What Sales Representatives Say Motivates Them . . .Except When the Data Shows Otherwise.”

Despite TGaS 2017 IC Landscape data showing that 22 of 24 companies use cash as the primary reward, TGaS asked a different question. When asked to describe what rewards were the most motivational, 55% of responding representatives said cash, but 35% chose “trip.” When asked about the “most motivational” contest they were ever part of, the votes for “trip” soared to 67%.

James Castello, Executive Director of the IC Solution, turned to the social sciences for an explanation. “People feel they need to justify luxury purchases,” he explained, “so cash feels more acceptable.” He also distinguished between the “want” self and the “should” self, which can result in a disconnect between what people say motivates them and the reality.

The lesson for IC executives? “If you want a highly motivated and engaged sales force,” said Castello, “be sure to include non-cash awards with a suggestion of ‘luxury’ as part of your sales compensation strategy.”

For more information about the studies and other aspects of Incentive Compensation, contact jcastello@tgas.com.

About TGaS® Advisors

TGaS Advisors is the leading benchmarking and advisory services firm for commercial organizations in the life sciences industry. With a roster of top 50, emerging and precommercial life sciences companies, TGaS provides robust comparative intelligence and collaborative network membership services. The team includes 50 experienced professionals, most with senior level experience in the life sciences and related industries.