Coming straight into a B school after engineering had its benefits, you save a couple of years over software counterparts. Now two months into the I am beginning to wonder if atleast some of 'them' were able to understand certain concepts better by virtue of being in the corporate jungle. Two months into fmcg has made me realize the importance of incentives. How you incentivize your salesman can drive up sales by as much as 30% in some cases. In the midst of the humbling sales stint I suddenly remembered an article i read just an day before my HR exam which was titled 'Why Reward A when you want B' and gave wideranging examples on incentivization gone awry.

I have observed some instances of it already. In the mad rush to meet targets it is a common practice in sales to dump stock into certain select distributors saddling them with excess stock thereby tying up the working capital and reducing their ROI. Now who are these select few?? They are in most instances the best distributors in the territory who have done well for themselves with prudent financial management and hard work. And a nice reward is given to them for doing a good job. The'reward' in this case of course doesnt deter them enough to perform badly as they are motivated by the greater need for making profits but it does lead to incorrect reporting of stocks to prevent dumping.

Another example ofwrong incentivization is the case of the cycle boys. These are salesman who sell low valued products to small shops which are considered 'not reliable' enough to be serviced through the normal credit system. Over a period of time they develop their shops to a substantial