There was a time when I thought repetition would solve most performance problems.

If something wasn’t happening consistently, I’d talk about it in meetings. I’d remind people in one-on-ones. I’d send Slack messages. I’d explain why it mattered. Then I’d explain it again.

Sometimes it worked.

Most of the time, it worked only as long as I was personally pushing it.

That’s when I learned something that has shaped the way we operate today.

People don’t consistently do what leadership talks about.

They consistently do what leadership rewards.

Company culture matters. Mission statements matter. Values matter. But if someone’s compensation rewards one behavior while leadership asks for another, compensation wins almost every time.

If you want behavior to change permanently, you have to make it worth changing.

That doesn’t mean handing out bigger bonuses. In fact, I think most bonus programs are little more than expensive traditions.

The classic example is the annual “10% Christmas bonus.” Everyone gets the same reward regardless of what they accomplished throughout the year. It feels generous, but it changes absolutely nothing. Nobody works differently in January because of a bonus they’ll receive in December no matter what. After the first time, it becomes an expected entitlement.

Money by itself isn’t an incentive. Money tied to measurable outcomes is.

Every meaningful incentive program we’ve built started with the same question:

What behavior are we trying to create?

Once we answer that, the compensation becomes surprisingly straightforward.

Our sales team earns recurring commissions because we want them focused on bringing in long-term clients. The more they sell, the more they earn. Eventually those commissions decline and then end because we also want them focused on selling, not living off deals they closed years ago.

That’s the carrot. There’s also a stick.

If someone repeatedly misses quota, there are consequences. Expectations only matter when missing them has consequences.

We’ve applied the same thinking across nearly every department.

When someone becomes a supervisor, we don’t permanently raise their base salary because they happened to inherit a team.

Instead, they receive additional monthly compensation based on the number of direct reports they manage.

If they take on more people, they earn more. If the team shrinks, the additional compensation shrinks too. If they stop supervising entirely, that component disappears. The incentive always matches the responsibility.

Our account managers have similar programs.

We value Google reviews, so we pay for Google reviews. We value reviews that specifically mention the account manager, so those pay more. We value video testimonials even more because they become powerful sales assets, so those pay the most.

The moment we introduced those incentives, we started receiving more of exactly what we wanted. Imagine that.

Retention works the same way.

Keeping a client for three years is dramatically more valuable than keeping them for three months. So our retention incentives increase the longer clients stay.

Again, the behavior follows the reward.

One of my favorite examples is a retention incentive we created for one of our directors.

We measure month-over-month retained MRR from existing clients. We established a minimum acceptable threshold and calculated how much additional profit higher retention generates for the business.

If retention exceeds that target, the director shares in the financial upside.

Now retention isn’t just a company goal. It’s personally valuable.

The interesting part is what happened next.

The incentive wasn’t just changing one person’s behavior. It started changing everyone else’s. When a director benefits from higher retention, they naturally coach their people how to retain clients. Better habits spread throughout the department because everyone’s attention moves toward the same objective.

The incentive created alignment, which is the real power of compensation.

Done correctly, incentives don’t simply motivate individuals. They shape entire systems.

Whenever I hear someone say, “People just don’t seem to care,” I usually don’t think it’s a people problem. I think it’s an incentive problem. People care deeply about the things that affect them personally.

As business owners, our job is to make sure those things also move the business forward.

If your team isn’t behaving the way you want, resist the temptation to schedule another meeting explaining why it matters.

Instead, ask yourself a harder question.

What behavior are you paying for?

If you’d like to compare notes, what behavior has been hardest to change in your business, and have you found an incentive that actually worked? I’d genuinely enjoy hearing your experience at [email protected].

~ Erik

About
Erik J. Olson is the Founder and CEO of Proxa, where he builds and operates multiple agencies focused on predictable, system-driven growth. He has scaled agencies across multiple markets by replacing fragmented execution with structured systems that drive consistent revenue. Erik is the author of Million Dollar Journey and writes The Business of Agency newsletter. He is building Proxa into a $100M platform with a planned private equity exit.