Merits of a Meritocracy

It is sometimes hard to implement a meritocracy. Maybe you have a great partner that has had an off year. You do not want to offend them, but they didn’t live up to the “merits” established to achieve a designation or incentive. Does it make sense to make the exception and “let them slide”? There are always good reasons for the exception. It is kind of like telling your daughter that she can have dessert if she eats all of her lima beans. Maybe she gets half way there and you allow her to have that piece of cake anyway.

My guess is that next time she will only eat half her beans again, expecting the exception.

You establish goals and criteria for a reason and hopefully you have based the incentive costs on the basis of achieving a specific goal. Exceptions will likely do more harm than good.

One of the traps that companies fall into is establishing an incentive based on a promise. The channel commits to $1,000,000 in revenue and you grant a discount level based on that commitment. What happens if they only achieve 90% of the goal? You have basically two choices. You can make the exception foregoing thousands of lost dollars, or you can ask for the discount difference back from your partner. Neither is an extremely attractive scenario.

I prefer to base incentive on performance in lieu of commitment. Once your partner has achieved a certain goal, they will reap the benefit…but not until the goal is met. This establishes a meritocracy that is equal amongst all partners and eliminates the awkward meeting at the end of the year.

It is important to be flexible, but not at the expense of your core principles that may have a bigger impact on your entire channel community.