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Nobody questions that sales and management are paid on performance. The rest of the company gets a fixed salary and a yearly review. Here are three places where that changed, in customer service, on a delivery route and on a packaging line, why points beat euros, and where these schemes go wrong.
Ask any company how its salespeople are paid and you will hear about commission, quota and accelerators before you hear about base salary. Ask about management and you will hear about bonus targets. Nobody finds that strange. Then ask about customer service, the drivers, the people on the production line or the maintenance crew, and the answer is a fixed salary, an annual review and, if the year was good, a small bonus that has nothing to do with anything they did personally.
The usual defence is that their work is hard to measure. In my experience that is rarely true. It is unmeasured, which is a different thing. Every one of those departments produces something countable, and once you count it you can pay for it. This article walks through three schemes I have seen work, one that I helped design and two I stood next to, and then sets out the rules I would apply to any of them. All three run on points rather than euros, and the last section explains why.
The first one started with an email. A client, an accounting office, had just acquired three other offices. All four used the same service provider, on four different contracts at four different prices. The client asked for two things: an overview of the contracts, and a proposal to align them. Here is how the thread went.
A six-message support thread. A client who has acquired three accounting offices asks for an overview of all contracts and a proposal to align prices. The agent sends the overview and forwards the proposal request to sales. Two weeks later the client asks when sales will reply; the agent sends the same overview again. The client points out they now have two overviews and asks for a reply to the second question; the agent asks what the second question was.
This is an extreme case, and it should never happen. But it does happen, in milder forms, in every inbox where agents are measured on volume alone. An agent who is judged on how many items they close has every reason to answer the first question they see and move on. The customer’s second question is somebody else’s problem, two weeks from now.
So the department was rebuilt around a simple scheme. Every task handled, whether an email, a call, a chat or a text message, earned the agent one point. If the customer replied and the case had to be reopened, and a new reply was needed from customer service, five points were deducted from the agent who had answered the first time. Ideally the same agent picks the case up again, but that is not always possible with holidays and sick days, and the penalty stays with the original answer regardless.
Five points for one mistake sounds harsh next to one point for one task. It has to be. The penalty is what makes an agent read the whole message, answer every question in it, and write the reply in a way the customer can actually follow. That is the one-stop-shop effect: the customer asks once, gets a complete answer, and does not come back. Play with the penalty in the figure below and watch which agent the scheme rewards.
An animated bar chart of two customer-service agents’ points over one week. The quick agent gets through 48 items, twenty percent more than the one-stop agent’s 40, and earns one point each, but six of them come back reopened; each reopen deducts a penalty and the second answer uses up a slot that would have gone to a new item. The one-stop agent gives up one slot in six to read properly and has one case come back. With a one-point penalty the quick agent still finishes marginally ahead, 42 points to 39; with a three-point penalty the one-stop agent leads 37 to 30, and with a five-point penalty 35 to 18.
The number to look at is the crossover. The quick agent gets through about twenty percent more items in a week, which is roughly what skimming buys you, and every reopened case costs both agents a slot they would have spent on new work. With a one-point penalty the quick agent still finishes a few points ahead, so nothing about the behaviour changes. At three points the careful agent is clearly ahead, and at five it is not close, with the inbox receiving a fraction of the angry follow-ups. The penalty has to be larger than the shortcut it is meant to prevent, or it is decoration.
Two things happened once the scheme was live. The first is that the volume of incoming mail went down, because more cases were solved on the first try and fewer customers had to write back. The second is that performance became visible for the first time. A few agents who had been coasting on volume were suddenly, measurably, costing the department points, and with less mail coming in there was less reason to keep them. That is not a comfortable sentence, but it is what happened, and it is a fair outcome of a fair measurement.
There was a second change alongside the points, and it matters as much. Customer service was given the authority to adjust contracts themselves. When a customer acquires other customers, the agent can now align all the contracts at the lowest of the existing prices, without a round trip through sales. The thread above would have been one message and one reply. An incentive to solve the case on the first contact is worthless if the agent does not have the mandate to solve it.
The second scheme is a strange one at first sight. At a bottled-water company, a delivery driver earned one point for every ten bottles delivered above a minimum of eighty bottles a day. Eighty bottles is the job; the base salary covers it. Everything above it is variable.
That only makes sense once you know how the deliveries work. This company runs push deliveries: like the milkman, the driver comes round on a fixed rhythm and swaps the empty bottles for full ones, whether or not anyone called. The rhythm depends on consumption: every one, two, four, eight, twelve or twenty-four weeks, the last one being the roughly six-monthly service visit. A driver’s route is therefore not a list of orders. It is a set of clients, each with a frequency, and a fixed number of stops the van can make in a day.
Now the incentive starts to work. The driver has two options at every stop: talk to the client or not. A driver who talks can offer the client a bigger drop at a longer interval. Instead of four bottles every four weeks, eight bottles every eight weeks. The client is visited half as often, which most of them prefer, and the driver has just freed a slot in the second cycle for a new client. Do that across the route and the same twenty stops a day carry twice the bottles.
A bar chart of one driver’s Monday over eight weeks, two four-week cycles of the same four regions. Each column is a stack of blocks, one per delivery, as tall as the bottles it drops: twenty four-bottle stops a day, 80 bottles, exactly the quota and zero points. A slider moves clients from a four-week rhythm with four bottles to an eight-week rhythm with eight: their second-cycle block slides over and merges with the first-cycle block into one double-height delivery, leaving a dashed free slot behind. A toggle fills the free slots with new clients on the same rhythm. With ten clients per region moved and the slots filled, the driver still makes twenty stops a day but delivers 120 bottles and earns four points; with the whole book converted it is 160 bottles and eight points, with eighty new clients on the book.
The figure starts where a lot of routes start: twenty stops of four bottles, 80 bottles a day, exactly the quota and not a single point. Move half the clients to an eight-bottle, eight-week rhythm and the first-cycle days climb above the quota while the second-cycle days fall below it. Fill those freed slots with new clients on the same rhythm and every day carries 120 bottles for four points; convert the whole book and it is 160 bottles for eight points, with the van still making twenty stops. The driver has gone from no variable pay to eight points a day by thinking about frequencies rather than by working harder.
The company leaned into this. Drivers got a sales training every year on how to talk to clients about it, and they earned points on what we called cross and upsell: cups, coffee, the extras that ride along in the same van. The driver became the salesperson for the existing book, which is the person best placed to be one. A driver who notices that two neighbouring clients are on different rhythms, and lines them up, is doing tactical planning from the driver’s seat.
It also gave drivers a real choice. A busy city-centre route carries a lot of bottles and a lot of points, and a lot of stairs. A countryside route carries fewer bottles and fewer points, and far less physical work. Both are legitimate choices, and the scheme lets people make them for themselves instead of having the trade-off made for them by a planner.
Which brings up the hardest part. A route with a lot of points is worth money, and someone decides who drives it. If the dispatcher, the planner or the supervisor hands the good route to a friend, the scheme is dead the same week. I have seen this first-hand, and nothing destroys trust and motivation faster than favouritism inside a pay scheme. Route assignment needs a rule that everybody can see, whether that is rotation, seniority, a published bidding round or a lottery, and the rule has to be applied even when it is inconvenient.
The third one is a packaging line at a pharmaceutical production company. Simple work: the product arrives, goes into its packaging, gets its labels, goes into a box, and the boxes go on a pallet. Management wanted to motivate the crew, so they put a dashboard on the wall: output against the shift quota, red until you reach it, green when you do.
I was on an evening shift when the dashboard went green about an hour before the end. There was no night shift to hand over to. So the line was stopped, everyone cleaned up without any stress, we were finished thirty minutes before the end of the shift, and we stood at the clock waiting to go home. The dashboard had done exactly what it was designed to do. It had told us when we were done.
An animated line chart of cumulative output over an eight-hour evening shift on a packaging line, as a percentage of the quota, with shaded bonus tiers at 80, 90, 100 and 110 percent. Two crews run identically for seven hours. The crew with only a dashboard on the wall reaches 100 percent at 21:00, an hour before the end of the shift, and stops the line to clean up, so its line runs flat and finishes at exactly the quota. The crew on a tiered bonus keeps running to the end and finishes at 114 percent: the same line, the same people, fourteen percent more capacity.
Toy numbers from one evening shift on a packaging line: the same crew, the same line, the same hourly rate. The only difference is what happens once the quota is in sight.
A dashboard motivates people to reach the number. Only a bonus motivates them to pass it. If the crew had been paid on tiers, something at 80 percent, more at 90, more at 100 and a real step at 110, that last hour would have been run rather than swept. The output would have gone up by something like the share of the shift that was currently spent waiting at the clock, on the same line with the same people. That extra capacity is not a rounding error. It is a production line that can take on another client, or one whose unit cost drops far enough to win share on price.
The same logic applies one step back, to the maintenance crew. Every stoppage on that line has a reason, and most of the reasons get logged: an alignment drifted, a part broke because its maintenance interval was missed, a sensor failed. If those logs are honest, you can pay the maintenance crew on uptime: a tier at 90 percent of planned capacity, another at 95, another at 100. Two caveats. First, measure it per shift, per day or per week, never per month, because a month with no downtime is a unicorn and a target nobody can hit motivates nobody. Second, build in contingency for what maintenance does not control. If an operator error stops the line, that stoppage should not count against the maintenance crew, and it is reasonable to let it count against the operator’s own bonus instead.
A dashboard tells people when they are done. A bonus tier tells them what the next hour is worth.
All three schemes pay in points and translate the points to money afterwards. That is not an accident and it is not a gimmick. Points solve a handful of problems that euros create.
The one rule that goes with points is that you do not change what earns them in the middle of a period. Change the value of a point once a year, with the salary round. Change the rules only with notice, and only with a reason people can understand. A points scheme that gets tweaked every quarter is just a discretionary bonus with extra steps.
Pulling the three examples together, these are the rules I apply when a client wants to extend variable pay past sales and management.
None of this is exotic. It is the same logic every company already applies to its salespeople, extended to the people who deliver what sales has sold. The output was always there to be counted. Nobody needs to be hired to count it.
The counting is a report, not a job. Tickets, reopens, bottles per stop, units per shift and downtime per line already sit in the ticketing system, the route planning, the ERP and the machine logs. A business intelligence tool pulls them together into one live report per team: today’s points, this month’s points, and the running total against last year. Building that report is a one-time investment of a few weeks, with occasional maintenance when a rule changes or a system is replaced. After that it runs on its own, every agent, driver and operator can see their score whenever they want, and the payroll export at the end of the period is one more tab in the same report.
Any of the mainstream business intelligence platforms can do this; the choice usually follows whatever your finance or IT team already runs. Two are open source if you would rather host it yourself.
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