Incentives in the Pharma Industry
Incentive programs play a crucial role in driving field force performance, especially in the Pharmaceutical Industry. Incentive programs for pharma companies are pivotal for driving sales force performance. The purpose of incentives is to boost productivity, enhance engagement, and to set up a performance-driven culture. Incentive programs motivate employees to work towards the common objective of the company as their efforts are linked to tangible rewards. Incentives are not only related to sales but can also be linked to call quality, educational outreach, compliance guidelines, and so on. Sales reps work under a competitive environment where every prescription counts, and incentives provide encouragement to perform consistently. Incentives are crucial for new drug launches as they can mobilize sales reps to educate HCPs and create market presence. Well-structured incentive programs are key to retaining top sales talent, reducing turnover, and keeping a stable sales force. Incentive programs should also comply with regulatory guidelines to promote ethical business practices. They can encourage field forces to deepen
their product knowledge and improve their communication, leading to more impactful discussions with HCPs. Incentives measuring qualitative as well as quantitative sales metrics should be encouraged. As incentive systems play a vital role in driving field force performance, what should be the best incentive model for pharma companies? Should incentives be decided by managers or employees?
Manager-Driven Incentive System
In this model, the company management decides and implements the incentive programs that include measurement of performance metrics such as targets, customer satisfaction scores, project completion rates, etc. The rewards could be bonuses, commissions, stock options, or any other award. Management can also set the eligibility criteria to qualify for the incentives. In this model, all decisions are made at a higher level considering the strategic company objectives, and often a standardized approach is considered for all employees. It can be easier to roll out at an organization level with the disbursement of budget. However, employees may feel disengaged as they are not involved in the process. A manager-driven incentive system is often one-size-fits-all, where individual preferences are sidelined and can be demotivating. If criteria are not completely transparent, employees might feel insecurity over favouritism. Stringent targets might engage in undesirable behaviour to meet targets, causing unethical practices.
Employee-Driven Incentive System
In this system, employees are involved in the design of incentives and allow better customization. It can include a menu of reward options from which employees can choose. This model can motivate employees as they are involved in the design of the incentives. It helps employees to foster a sense of trust in the system. Employees feel valued and can lead to the retention of top talent. As rewards are better aligned with personal and company objectives, it can give a sense of shared ownership and teamwork. However, employee-driven incentives can impose sales challenges that include managing a complex design of incentives, potentially leading to misalignment with company objectives. Allocating a budget could be more challenging, and too many choices can overwhelm employees.
Effective Incentive System
An incentive strategy for a sales team needs structured as well as flexible plans. An effective incentive system should follow the SMART principle—being Specific, Measurable, Achievable, Relevant, and Time-bound It should involve employees understanding how the system works for everyone with fairness. Incentives should be delivered promptly after achievements and could be monetary or non-monetary, and valuable to employees. Regular evaluation and feedback can improve the system.
Resolving Manager or Employee-Driven Incentive System with Keacyte Incentive
Engine
1. Incentives are designed to measure, motivate, and reward.
With Keacyte, incentive slabs and eligibility can be configured designation-wise and division- wise for sales reps and managers. Its dynamic incentive module is directly linked to sales performance, supporting monthly, quarterly, PCPM, and special bonuses. It can adapt to roles, divisions, and targets integrated with real-time sales data. It ensures accurate tracking, eligibility checks, and transparent payouts at every level. Tracking of performance-based incentives on both sales and effort-driven efforts ensures fair rewards with clearly defined qualifying criteria. It aligns your incentives with your performance. You can track, qualify, and celebrate success with real-time insights and transparent recognition. It also provides detailed incentive reports by employee, region, month, or quarter.
2. Finding the Right Balance
The effective incentive system is a combination of both manager-driven and employee- driven systems. The right system will have structured as well as flexible incentive plans. Management defines company goals and performance metrics, while employees can contribute by choosing the rewards that motivate them most Companies can choose the best incentive system as per their size, culture, and specific goals, engaging and motivating employees to improve performance and instil a positive work environment. Incentive systems can be dynamic and adjusted based on continuous feedback and results. Finding the right balance between management-driven or employee-driven systems is essential and can become easy with incentive module tools like Keacyte.