#4: Wooley & Fishbach—Why Timing of Incentives Matters (A Lot)
Following up on the Freedman & Fraser study that made it into 5th place from my Top 5 pieces of research behind Nothing Left to Take Away, we come to #4.
A question that often comes up is, “How often should we pay people?” The answer is simple: as often as possible and as close to the moment of sale as practical!
The timing of incentive payments significantly influences how motivating those payments are, as demonstrated clearly by Wooley & Fishbach in their research on how the timing of rewards impacts motivation.
In their study, participants were tasked with completing activities that earned rewards either immediately or after a delay. The researchers found that participants who received immediate rewards reported higher motivation, increased enjoyment, and were more persistent in continuing the activity compared to those whose rewards were delayed. Essentially, rewards delivered promptly created stronger associations between actions and their outcomes, boosting ongoing engagement and productivity.
What does this mean for sales incentives? In essence, we can increase productivity for free simply by accelerating the timing of payments. As someone who appreciates getting stuff for free, this resonates deeply with me.
This research points clearly to two practical takeaways: First, shorten payment cycles whenever possible—monthly payments motivate more effectively than quarterly ones. Second, carefully consider your Payment Trigger (the event that generates Sales Credit). Earlier Payment Triggers, such as booking, are far more motivating than later triggers tied to revenue recognition or cash collection.
Stay tuned for #3…