Sales incentives only work when your team earns them. In today’s episode of Lessons in Leadership, leadership expert and founder of LearnToLead, Dave Anderson breaks down why SPIFF programs should have clear qualifiers and how dealerships can avoid rewarding mediocrity while cultivating top performers.
SPIFF programs are common in sales departments, but Anderson emphasizes that their effectiveness depends on structure and fairness. He notes that spiffs should reward the right behaviors and the right people. If participation is automatic or unearned, it risks creating a culture of entitlement where employees assume they deserve extra incentives regardless of performance.
He recommends a qualification system to maintain a high-performance culture. A typical method is a 90-day qualifier. For example, if a team member does not hit a defined performance threshold over a 90-day period, they are temporarily ineligible for the SPIFF program. This approach encourages consistent effort and helps employees recognize that incentives are a privilege earned through measurable results.
"If you keep giving people something for nothing, eventually you make them good for nothing when it comes to performance."
The philosophy behind spiffs matters. Anderson cautions against using them as a tool to “trick” underperformers into competence. Instead, they should reinforce healthy habits in employees who are already performing well. Properly structured, spiffs reward repeat success, build financial enrichment for top performers, and help retain high-performing team members.
He also points out that minor adjustments in SPIFF programs can have a significant impact. Rewarding people for things they do not need to earn can lead to complacency and a reduction in accountability. By attaching clear qualifiers and focusing on repeatable behaviors, dealerships can drive meaningful results while maintaining a strong culture of earned success.
