Question: I used to run the company that made Formula 409

“I used to run the company that made Formula 409, the spray cleaner. From modest entrepreneurial beginnings, we’d gone national and shipped the hell out of P& G, Colgate, Drackett, and every other giant that raised its head. From the beginning, I’d employed a simple incentive plan based on ‘case sales’: Every month, every salesman and executive received a bonus check based on how many cases of 409 he’d sold. Even bonuses for the support staff were based on monthly case sales. It was a happy time, with everyone making a lot of money, including me.” “We abandoned our monthly case- sales bonus plan and installed an annual profit- sharing plan, based on personnel evaluations. It didn’t take long for the new plan to produce results.” Source: Wilson Harrell, “Inspire Action: What Really Motivates Your People to Excel?” Success, September 1995.

What do you think happened at this company after it started the annual profit- sharing plan?

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