What's Left When the 'Bribes' Are Gone.

• Author: Hall, Robert
• Position: The banking industry and costly sales incentives - Brief Article

"I dread finding myself in front of the CEO and the board trying to explain how we paid out dramatic increases in incentive compensation dollars for sales production that somehow brought in only a single-digit increase in revenue with little to show for it on our bottom line."

--Head of retail for a top 20 U.S. bank, in a conversation on sales incentives

Lately, I have heard several executives unload similar fears and regrets. They are struggling to deal with a flawed incentive strategy that hurts all the institution's constituencies:

There is the board, persuaded to approve ever-larger budgets for incentive comp on the promise of more revenue, profits and shareholder value.

There are managers, like the head of retail above, aware now that if incentive comp is the only arrow in their quiver, they will likely run out of money before they can build a sales force that can create...