Any first-hand examples of incentive programs driving revenue growth?

My experience is that it is very difficult to structure an effective incentive plan. There is an almost impossible balance to strike between having a stretch incentive target (and not such a stretch that it is demotivating), having an appropriate corporate incentive target, and not diluting earnings.

My main client is a distributor/sales organization which relies on tight inventory management to balance meeting customer needs at short notice, without keeping too much excess on the shelf. There are some value added services in about half the business volume, and a small specialty manufacturing element on site. So we have several diverse goals in designing incentive programs to meet the overall corporate goals. We focus on only two numbers for incentive purposes. Revenues -- supported by tiered commission programs from the junior sales staff to the national sales VP. And EBITDA -- other managers, operational staff and execs are rewarded based on whether EBITDA meets an annual goal or close % thereof. So we have employees working on revenue growth and others monitoring the cost structure (bottom line). Any thoughts of bringing in more complicated ROI type incentive programs would make it hard to explain, to monitor and for employees to influence. Most employees would not understand such classic financial measures anyway and would feel that they are subject to smoke and mirrors beyond their influence. I feel that those types of measures (return on investment, cash flow, debt/equity ratios, etc.) are more for the CFO and execs to monitor -- and you could create more sophisticated incentives just for those folk to monitor such criteria. I would not use an outside vendor to implement such plans. We do it ourselves with good success, and we keep it simple. I have no other data sources to suggest, but incentives have worked well in this particular company -- the result is steady growth even through recession, strong EBITDA %, little capex needed, and debt paid down at accelerated rates.