Power of Incentives & Commission

Incentives are not just financials, it also include Prestige, Freedom, Time, Titles, Power & Admiration. Incentives plays a major roles in getting job done fast and efficiently. Federal Express business is to deliver the couriers to different countries on time. If there was any delay in delivery, it destroys their trust and business. All planes of the FedEx comes to one place and the couriers are exchanged between planes

The biggest challenge is they could never get this done on time. The company tried all possible ways to get the job done on time, nothing worked. Later, the company identified a solution and they started paying their employees based on shifts and not on hour. Once the workers completed their job, they all can go home. By this practice, the companies problem cleared up overnight. This is the power of incentive

"Perhaps the most important rule in management is to get the incentives right" - Charlie Munger

Linking incentives to a system is like the system takes care of itself. It also builds win-win relationship between the management and its employees. Any product which gives more commission is going to sell more. No matter how harm the product is. It all depends on the commission and incentives.

Have a Great Day

B G Nareshkumar