JNR Spotlight: To Stair-Step or Not to Stair-Step

Tiered or “Stair-Step” programs are a common incentive structure, awarding individuals or businesses with increased per unit payouts as they reach certain thresholds of sales production.  Makes sense, right?  Sell more, get more – the ultimate in pay for performance.  For example, sell 1 to 10 widgets, earn $5 per unit.  Selling 11 to 20 widgets and earn $10 per unit.  For selling 21 to 30 widgets, earn $15 for each widget sold.  Other elements can also be incorporated into the program, including fast-start bonuses, making structures more complex.

The stakes get high when the program is retroactive, meaning the $5 that you get from selling widgets 1 through 10 becomes $15 per unit from widget one – when you reach the target bonus  threshold.  Wow, a lot of money is on the table at the end of the program as participants strive to hit that top tier.  Sounds exciting, doesn’t it?

These programs can be quite controversial however, especially in industries such as automotive where Stair-Step programs can actually create an unequal playing field between large and small dealers – if the program structure is too general for all dealers in the network.  The larger volume dealers may use their forecasted Stair-Step dollars to arbitrarily offer discounts to customers.  Large dealers always set the market price.  With Stair-Step programs, they can control and manipulate market pricing with little to no price competition from the smaller dealers.  Large dealers increase volume; smaller dealers struggle to be profitable.  This can also cause an eroded customer experience.

Smaller dealers are forced to make a decision: do they take a gamble and match market pricing of the larger dealers, betting that they will reach their Stair-Step objective and come out of the program profitable.  That can be a big risk for dealers in a small market who have limited potential.  This is why the National Automobile Dealers Association (NADA) has taken such a strong position against Stair-Step incentives as they can negatively affect a large portion of their membership base.

So what is a manufacturer to do?  They want to drive volume, especially in cases with excess inventory, need to move certain models or need to drive market share.  They must take care of their top dealers and if mid to small dealers can reach set thresholds, they win too.  However, in too many instances smaller dealers can take a hit directly to their bottom line.

So manufacturers should and do care.  They are taking action with different incentive structures that include:

–          Periodic Bonus – disrupts the month-end discount push, but forward thinking large dealers will eventually adjust their annual strategies to a monthly projection in order to set market price.

–          Groupings – set specific attainable tiers, by dealer or groupings of similar sized dealers, based on historical volume.  Gives dealers of all sizes more of a comfort level in reaching their objectives.  However, can still put discounting power in the hands of the larger dealers.

–          Non-Cash Incentives – take away the cash element and give dealers trips, experiences, merchandise, rewards to disburse to their teams, etc.  This is quite effective in engaging dealers to motivate their teams to exhibit the right behaviors everyday to drive sales and achieve quota.  Some dealers can, however, use cash-based discounting to drive sales in contest periods in order to achieve the award objectives.

While popularity and implementation of Stair-Step programs ebbs and flows with the economy, they will be utilized by sponsoring companies in some form or another for the foreseeable future.  With advances in program structure, analytics and past experience, companies will be tasked with designing programs that will` generate their desired effect.  That means recognizing clout of your top performers and maximizing potential of the middle group through strategic design and engagement.

As an incentive marketing company we support our clients’ incentive initiatives with a variety of tools to engage, motivate and reward their target audience(s) for achieving and exceeding their goals and objectives.  Fundamentally, for programs to be effective and successful, the following incentive principles should be adhered to:

–          Is the program attainable?

–          Can the program be communicated clearly and is it fair?

–          Are expectations clear and is progress toward achievement communicated adequately?


Following these principles virtually assures a successful program with maximum participation.  It does take work and collaboration with various business teams to understand the dynamics and nuances of their business, so together they can develop programs aimed at driving behaviors that generate optimal results.

For more information about JNR and how we help companies design and execute successful incentive programs, feel free to give us a call at 800.343.4546.  That’s what we’re here for and what we do every day.


By JNR Incorporated

Written by Mark Houska

Director, Business Development


JNR Incorporated is a results-based, globally recognized leader that specializes in creating custom travel, meeting, event, prepaid card and merchandise programs that motivate, engage and inspire the employees, customers and channel members of our clients. We have over 30 years of experience working with Fortune 500 companies of many diverse industries. Our programs are tailored to fit the specific needs of marketing, sales, management and human resource professionals. The unique solutions we apply are measurable and proven to increase performance, loyalty and revenues.

6-Step Guide to Creating a Successful Sales Incentive Program

Sales incentive programs are intended to drive profits and help your sales team rise to new levels of success. Creating a successful incentive program involves adhering to several key components. The following is a 6-Step Guide for driving incremental sales with your incentive program:

1. Define Objectives: Before you begin creating an incentive program, it is important to gather the right information and ask the right questions:

  • Why does your team need to be motivated?
  • What behaviors need to be influenced?
  • How does the incentive program align with your business goals?
  • How will these objectives be measured?

2. Decide the Type of Reward: What type of reward will best motivate the members of your team? You may want to offer travel, merchandise, prepaid MasterCard® reward cards or customized promotional items.

3. Acquire Budget Approval: When implemented correctly, incentive programs are self-funding strategies that are paid for with the profits generated by the program. Demonstrate that the program is a win-win by illustrating scenarios of sales results at each level.

4. Create a Buzz: Decide how you will promote the program. How will you get your sales team excited about the program before it starts? How will you kick off the program and continue to encourage your team from start to finish?

5. Craft a Communication Campaign: Continuous communication is key to a successful sales incentive program. A creative communications campaign can integrate elements of meetings, emails, newsletters, promotional products or announcements from beginning to end. Inform your participants of their proximity to required goals, and continually coach them on how to reach their goals.

6. Track Progress.  Decide on the best method to track progress. The measure chosen should help the organization track progress towards strategic objectives and reflect improvement in productivity. Real time, up-to-the-minute reports determining patterns of participant engagement are an integral element of the program’s success.

For more information on the steps to creating a successful incentive program Click Here

Kelly Woolsey

How do you Reward your Employees?


Every company can benefit from a tactical incentive system for employees. How do you promote employee motivation, engagement, inspiration, performance, and appreciation? What are you compensating your employees for? What are the behaviors you want to reward?

The most effective incentive or reward programs use data to engage employees directly relating to your companies objectives. The first step is to identify your objectives, do you want to increase sales, motivate continued education, or inspire green living through a ride share program? Each organization has unique goals. Each type of goal requires a different form of reward or recognition.

Many businesses have found long-term rewards for key individuals to be extremely beneficial to their organization. What are long-term rewards? An Annual Partners Retreat in Kauai, an Award Ceremony for top sellers, or an exclusive Jacket for individuals recognized with innovative ideas.

Our experience has proven using incentive programs to motivate employee performance is a cost effective means for boosting sales, and driving your company’s success. We challenge you to review your current rewards system. Does it address the goals of your organization, recognition of your employees, and appreciation for specific actions?

JNR Incorporated specializes in creating innovative incentive programs—our services range from creating unique and memorable incentive travel programs, planning Musical Productions, to building one-of-a-kind websites and issuing Prepaid MasterCard® Reward Cards.

Give us a call at (949) 476-2788 to discuss the needs of your organization!



In today’s high-tech world, corporations really need to do a better job of directing their resources appropriately. Many large companies are still allotting significant budgets for both TV and newspaper ads, just as they have been, year after year. The unfortunate reality is that neither print nor broadcast media enjoys the impact on consumers that it did in the past, and that means that much of this sort of advertising messaging is drifting away unnoticed.

Many newspapers are now read online, with a minimum of ads appearing. TIVO and other state-of-the-art technologies have made it possible to fast forward through TV ads, rendering them ineffective. In view of this changing dynamic, it makes good business sense to direct marketing dollars strategically—to those areas where they can provide a better return on your investment. Incentive programs are the perfect option for redirecting a small share of your company’s overall marketing/advertising dollars toward programs that boost incremental sales through strategic program, providing your company with a true ROI. At JNR, we believe that each company would be amazed to see the results of allocating 5% to 10% of their marketing/advertising budget toward a strategically designed incentive program—either using incentive travel or Prepaid MasterCard Reward Cards as the ultimate rewards. Redistributing this modest amount toward unique, memorable, and professionally developed incentive program will have a greater chance of ‘moving the needle’ in the desired direction without impacting your business plan negatively. The benefit of investing in developing a strategic incentive program will be a true ROI, which dollars spent on broadcast and print media cannot provide.

As an organization that has designed and delivered thousands of successful incentive programs throughout our three decades in the service industry, we are here to help you achieve your most ambitious goals. Let us help you customize an incentive program to meet your specific objectives, participants and budget. Feel free to contact me personally at jimjalet@jnrcorp.com

Jim Jalet
President and CEO, JNR Incorporated

Keep Your Employees Happy with Incentives and Reward Programs


Being consulted about decisions and receiving recognition for your achievements are key factors in the success of any relationship, whether personal or business. Being a part of a team, working with good people, sharing ideas, deciding how to perform tasks, making good decisions, and solving problems together all affect performance and satisfaction and motivate people to do better.

When it comes to running a successful business, it takes a team of people to make it happen. You need honest, capable good leaders and a great team of reliable hardworking employees to achieve your business goals. It takes dedication, motivation and skillful work by everyone to ensure that the business runs efficiently and effectively. Employee loyalty and employee retention are critical factors for creating and sustaining a healthy business.

To keep employees happy, employers must treat them fairly, provide a good, safe work environment, offer opportunities for them to be involved, to excel and achieve, and let them know that you recognize and appreciate their individual efforts. To keep your business running productively and profitably, it’s critical to offer your employees opportunities for growth, development and achievement. The most cost-efficient and successful way to do this is to create employee engagement through business performance incentives that recognize and reward accomplishment.

It’s simple really: When you treat your employees with respect and collaborate with them on decisions that impact their work, they will care about you and your company. They will stay with you longer, be loyal to your mission and brand, and do their best every day to provide the best quality products and services. Confident, positive employees encourage others to feel the same way, which in turn yields customer, client, supplier, co-worker and C-suite executive and shareholder satisfaction.

When given clear, meaningful goals and well-defined tasks, resources and tools, employees take the initiative to achieve by using their better judgment, improving their performance, influencing decision making, ensuring positive results, and taking pride in their work and the organization.

Your organization will realize tangible results, such as improving employee retention and lowering overhead costs, as well as intangible results, such as creating a desirable work environment, by implementing quality incentive programs. These could include sales incentives, service incentives, safety incentives, wellness incentives, loyalty incentives, continuing education incentives, travel incentives, prepaid rewards card incentives—the possibilities are endless. No matter what type of employee incentive program you prefer, you are sure to see an increase in employee engagement and employee performance when you design a program that acknowledges and rewards specific objectives.

Employee incentive reward programs that are structured strategically, promoted, communicated, operated, awarded, fulfilled and measured correctly, will provide employee recognition that will impact everyone involved positively. Whether you design your own programs, or work with an incentive, recognition and reward partner like JNR, be sure that you are rewarding and recognizing employees effectively.

For more information on creating an employee incentive program, feel free to contact us at: jnrinfo@jnrcorp.com

LuAnn Jalet
COO, JNR Incorporated
949-476-2788/ jnrinfo@jnrcorp.com