Fixed Matrix Comensation Plan

The fixed matrix is a unilevel plan with fixed width with the member being paid percentage on each level. In other words, you could have a matrix 5 wide by 5 deep. This would you give you a total of 3125 members in a fully loaded matrix.

Aim
The aim is to develop a full matrix. To do this, the member must have 5 recruits who have 5 recruits and so on until the matrix is full. Unfortunately, not everyone plays the game. A successful member would therefore land up recruiting more than 5 people with the overflow being placed into the wholes in the matrix. For a person who plans on doing nothing this is a fantastic plan. You join, do nothing, your team grows and you get money. For the people doing the work it can be very frustrating. As you can probably tell, I am not a great fan of te fixed matrix plan.

Drawbacks
The fixed matrix plan suffers from the same drawbacks as the unilevel plan. Due to the limitation in width, it requires a great deal more creativity to make it profitable.
Once the matrix is full, the member is required to take up a second position in order to grow his business.
Sales happening below level 5 in this example would be lost to him.
Inactive members in his matrix could lead to loss in profit.

Making the fixed matrix plan work
Making this plan work requires a little more creativity on the part of the company:

• Compensation Compression
  This is a mechanism that allows a member to be paid on sales happening below his 5th level by skipping inactive members in his matrix. Let’s say you have a team that is 5 levels deep and your frontline member is inactive. This would effectively give you just 4 levels to earn from. Compression compensates for this by paying you on the 6th level. If In this way you are always paid on five levels.
  
• Matrix compression
  This mechanism literally removes inactive members from your team and places their downline member in the gap. By compressing the team in this way, you eliminate the gaps created by inactive members.
  
• Multiple positions
  In most cases, the only way to build a team is to hold multiple positions in the matrix. This is great for the company as they can recruit the same person multiple times. It is not so great for the member as they are having to buy additional positions in a company that they already belong to.
  
• Value Positions
  Some companies will sell you a more expensive position that allows you to generate a higher percentage from each level.
  
• Promotions
  It is also common practice to create a rank structure that pays greater commission on deeper levels. As the member rises in rank, they are paid greater percentages or they are paid on deeper levels.
  

Conclusion

I feel that the disadvantages of the matrix plan far outweigh the advantages. I would therefore not recommend this type of plan to a client.

Unilevel Compensation Plans

The unilevel compensation plan is great grandfather of all compensation plans. It is based on the principle that you recruit as many people as you like and they do the same. The team will therefore grow wide and deep in a fairly haphazard structure. You are then compensated based on depth.

What does this mean?
Let’s say you recruit 25 people personally. You are said to have sponsored these people and they are in your fist level. If these 25 people together sponsor a total of 7 people, your team size grows to 32 people with 7 of them on your second level. This theoretically can go infinitely wide and deep.

A simple plan would typically pay 5% per level, 7 levels deep. This means that any sales that take place within the first 7 levels of your network will earn you 5%. Any sales that take place in level 8 and deeper will generate no income at all.

Break even
The unilevel plan is usually associated with subscription based structured payment sales and the network member is usually required to be one of the subscribers.

On the surface this seems like a simple and effective plan but if you start doing the math you realise that there is an intrinsic and I believe substantial flaw. The big drawback is that only a small percentage of the membership will be able to break even and an even smaller percentage will be able to make money.

This is easily calculated:

• Take the 100% (being the total month investment made by the sponsor) and divide it by the average percentage payout across all the levels. This gives you the number of members needed to break even.
• 100 / 5 = 20
  Only 1 in 20 people are breaking even therefore 95% of the network fails.

The unilevel plan does however have a number of strengths that make it almost irresistible to most companies.

• It is very simple to explain.
• It drives recruiting as there is no other way for a network member to make any money.

Making a unilevel plan work
I don’t recommend using a unilevel plan by itself. It can, however, be very effective as part of a larger plan. Many companies use the unilevel concept as the core of their plan and build mechanisms that reduce the impact of its weaknesses.

Compensation Plan example
In the following example we will use the unilevel as the core of the plan and build a number of mechanisms to reduce its negative impact.

Let’s start with the core:
The first aspect of the plan that need to be developed is the unilevel core. The following is an example of what that could look like:

Adding Breakage
Next we need to build in some breakage. To do this we add qualification requirements. As a persons rank status increases, the compensation plan will pay on additional levels deep. The converse is also true. As the rank status decreases, the compensation plan will pay out less.


Group volume bonus
To encourage leaders to develop leaders we will could ad a Group volume bonus. This type of bonus is also known as an infinity bonus. It pays on every person in your team that is at your rank or below and it pays infinitely deep. In the table you will notice that a Double Diamond (DD) will ear from someone of a Diamond and a DD but not from anyone who has a rank above DD. This is an additional form of breakage.


Next we will add a once off promotion bonus. This bonus is paid out the first time the member reaches a rank. If they fall back to a lower rank and are promoted again they will not receive a bonus.
NB! All the above commissions are calculated on the wholesale value of the sale.

Lastly we need to ensure that everyone is also focused on sales. We therefore ad a sales discount of 25% and a volume based personal sales volume bonus of 5% if the member personally sells over a certain volume.

This compensation plan will pay out a maximum of 54% in commissions and 25% in discounts. The reality is that after breakage, the company will pay out an average of 38% in commissions.

This plan provides the member with the ability to earn 30% on personal sales. There is therefore no excuse for not making money. If they are team builders, they can earn from the activities of their team and if they are that rare bread of individuals that can reach stratospheric levels through recruiting and motivating huge teams, they will earn on their entire producing team via the infinity bonuses.

The Stair Step Compensation Plan

This is a typical stair step compensation plan. Starting from the bottom and working up you find the following ranks:

• Agent
• Emerald
• Ruby
• Sapphire
• Diamond
• Crown

As members are promoted their income potential increases. In this example the compensation is as follows:

The first three ranks in this example will receive differential commission of up to 45% depending on rank.

Agent
An agent receives 25% discount off the retail price. He then sells the items at full retail and thereby generates a profit.

Emerald
An emerald is the first rank to receive over-riding commission. In this example the emerald is on a sliding scale and depending on a combination of personal and group sales will receive up to 35% on all personal sales and up to 10% on sales made by his team

Ruby
A ruby receives 45% on personal sales, between 10% and 15% on all ruby sales and 20% on all agent sales.

Breakaway (see definitions)
One of the big draw backs of the stair step model is the elimination of profits due to downline promotion. Simply put: If I am a Ruby and I have a downline member who becomes a ruby then we will both be receiving the same discount. This means there is no differential and I will earn nothing from my downline ruby’s sales. To overcome this problem, the breakaway concept was created.

This is not an easy concept to deal with as it varies vastly from company to company. In this example however the ruby is earning maximum discount. His upline is no longer earning from him so he is deemed to be a breakaway. To prevent the upline’s income from disappearing altogether a royalty is paid on his breakaway volume up to 3 levels of breakaway deep.

Sapphire
In addition to their ruby commission a sapphire receives and additional 2% royalty on volume generated by rubies in their team.

Diamond
In addition to their ruby commission a diamond receives and additional 4% royalty on volume generated by rubies and 2% on volume generated by sapphires in their team.

Crown
In addition to their ruby commission a crown receives and additional 6% royalty on volume generated by rubies, 4% on volume generated by sapphires and 2% on volume generated by diamonds in their team.

Promotion and compensation qualification
The stair step model is governed by qualification requirements. In this example they are as follows:

Agent to emerald

• R10,000 total group volume for 3 consecutive months
• R1000 personal sales volume for 3 consecutive months

Emerald to Ruby

• R40,000 total group volume for 3 consecutive months.
• R10,000 personal group volume for three consecutive months
• R1000 personal sales volume for 3 consecutive months

Ruby to sapphire

• R200,000 R40,000 total group volume for 3 consecutive months
• R25,000 personal group volume for three consecutive months
• R1000 personal sales volume for 3 consecutive months

Sapphire to diamond

• 800,000 R40,000 total group volume for 3 consecutive months
• R25,000 personal group volume for three consecutive months
• R1000 personal sales volume for 3 consecutive months

Diamond to crows

• R2000,000 R40,000 total group volume for 3 consecutive months
• R25,000 personal group volume for three consecutive months
• R1000 personal sales volume for 3 consecutive months

Demotions form an integral part of this plan and are triggered when any member falls below 80% of their qualifying bonus for three consecutive months.

Breakage
Regardless of the rank members reach, they are paid on the level that they qualify for. For example: Any member who does not achieve R1000 in personal sales will receive no differential or over-riding commission at all. These commissions are retained by the company.

There are inherent strengths and weaknesses in a plan of this nature.

Strengths

• A new member is able to generate a substantial and consistent income from day one. The 25% discount allows them to set up presentations and to make sales.
• Members can generate an income without recruiting a single person. There are many people who would rather sell than recruit.
• Team leader are able to generate substantial income from agents due to the massive differential commission of 20%.
• There is a strong focus on sales. A small motivated team can achieve tremendous volumes

Weaknesses

• The team requires substantial and ongoing training to achieve consistent sales
• The team requires constant motivating
• Growth is slow due to the focus on sales
• There is a high attrition rate
• Leaders are likely to experience massive income dips due to downline promotion.

As you can see by the graph, every time a downline member is promoted, the upline leadership looses a large portion of their income. This only needs to happen once or twice before the leader quits the business.

If your main aim is to develop a sales team then this is not a bad option.

Breakage

Breakage is the percentage of commission retained by the company due to poor performance by a network member. If the compensation plan is the carrot then breakage is the proverbial Stick.

Breakage is used by most companies to balance the networks need to make large commissions with the companies need to show a profit.

The unfortunate truth is that only 20% of all network members will put in the required effort. This 20% must be rewarded if your network is to grow. The compensation plan is therefore normally geared to pay this 20% an excellent to exceptional income. To maintain company profitability, qualification criteria are implemented. This ensures that inactive or ineffective network members receive the minimum reward.

How would this work in practice?
Let’s take a company that pays a total commission of 50%.

• 25% Discount
• 10% Differential over-rides
• 6% Royalties
• 6% Bonuses
• 3% Once off bonuses

Example of possible breakage rules:

• Each member must achieve minimum personal sales
• To receive differential over-rides a members must have a certain number of direct recruits
• To receive a royalty a member must have minimum personal group volume
• To receive bonuses a member must have minimum personal and minimum total group volume
• To receive a once off bonus a member must achieve a certain rank

As stated before, only 20% of the network will achieve the big bonuses and within that 20% a small group will achieve all the possible bonuses. This means that a sizable section of the possible commission payout will be retained by the company. It is therefore quite conceivable that a company such as this would pay an average of 40% rather than the full 50%.

This may seem a little harsh at first glance but there are few places in life where you are rewarded for poor performance. Run any business badly and you are unlikely to make money from it. Even as an employee, you can only get away with a certain level of ineptitude before getting your marching orders. Breakage allows the company to reward top people without risking bankruptcy.

Of course, this can lead to a great deal of winging. If you go onto the web (www can sometimes stand for “World Wide Wingers”) you will discover thousands of sites established by people who are disenchanted with the MLM industry. Although there are unfortunately many legitimate problems stemming from unethical business practices, you will find the vast majority of complaints come from people who would like to do nothing while earning something.

Compensation as a tool to drive behavior

Let's take a look at compensation plans.
The compensation plan is one of tools used to drive network behavior. Networks that have a consumption bias would use a different plan to those who favour sales. In many cases, a hybrid of different plans is used to strike a balance between recruiting and sales. These hybrids rely on numerous forms of additional compensation rules that attempt to bypass or overcome weaknesses in the fundamental plan.

If the majority of a network members income is generated from discounts and sales incentives then this will encourage sales. On the other hand, if the majority of income is derived from downline commissions the focus will be on building a team. The trick is to strike a balance between these two issues and in so doing create “Compensation Plan Utopia” (Cue trumpets and herald angels singing).

In order to make an educated decision you need to have a reasonable understanding of how each of the various compensation plans work. I will provide a brief overview in this section. I will then add a detailed description under discreet headings elsewhere in this blog.

Unilevel Compensation Plan
The Unilevel compensation plan is based on the principle of unlimited width with limited depth. This means that you could recruit 5, 50 or even a hundred people into your front line and you would get paid on all sales made by them. If they did the same (your second level recruits) you would receive an income from their sales and so on. This plan usually pays down 5 to 7 levels. The percentage paid on each level can vary drastically from company to company but the total resulting commission is usually around 45% of wholesale.

Forced Matrix
The forced matrix is similar to the unilevel but restricts the width of your team. This plan usually has a 5 x 5 or 3 X 7 structure. It is this structure that has led to the term “pyramid” being used to describe the industry.

In this plan, you can only build your team a limited number of levels wide. Any person you recruit over the minimum levels will be placed into the next level down and so on until the matrix is totally full. You would land up with a structure that looks as follows:


Stairstep breakaway plan
With the stairstep model, a member is paid according to qualification milestones. As their overall volume rises in relation to their downline, they receive bigger personal discounts and larger over-riding commissions on their team’s sales. At a predefined volume, they break away from their upline to become a leader of their own group. As the breakaway increases in rank and status, he receives additional bonuses and royalties.

In this example, a Tripple diamond will receive 45% on his personal sales and 25% on the sales made by a Ruby in his team.

Binary Plan
With the binary plan, you typically have a 2 leg forced matrix. Each moth your volume for the legs is totaled and you are paid on the weakest leg. This model has been known to encourage rapid growth but also results in high fall out due to the difficulty of balancing the two legs.
Within the above plans are subtle rules that allow you to maximize results.

Compensating for breakaway
In plans such as the stairstep model, differential commissions are reduced to zero as downline members climb the ranks and qualify for a bigger slice of the pie. To overcome this shortcoming additional rules in the form of royalties, bonuses, once off payments and fixed monthly amounts.

• Royalties
  This is normally paid on breakaway members of your network + their entire team down to a specific number of break away levels deep.
  
• Bonuses
  These are paid to encourage team leaders to help their downline breakaways to achieve promotion up the rank structure of the organization.
  
• Once off payments
  At the time of breakaway, the upline can some times lose a large portion of his or her income. To soften the blow, many companies pay a once off bonus.
  
• Fixed monthly payout
  This is also sometimes called a lifestyle bonus. When network members achieve specific ranks and for as long as they remain at these ranks a fixed monthly amount is paid to the qualifying member. (Whew… what a mouth full!). This is often given in the form of a company car or some other such perk.
  
• Shared compensation
  Companies often reserve a couple of percent for rewarding the top members of their teams. This percentage is split between the top leadership and is traditionally paid on an annual basis.

MLM & Network Marketing Terms

Achievement Level: A rank or title that is achieved by moving a certain amount of product per month and / or re­cruiting a certain number of distributors who themselves have attained a certain designated achievement level.

Affiliate Program: An Internet business, such as Richdad.com, that allows people to become affiliates simply by providing a link on their Web sites to a corporate home page, and pays affiliates a commission on all sales made through that link.

Autoresponder: A Web site or a service Aweber that e-mails information automatically to anyone who clicks on the responder.

Binary: A type of compensation plan that limits your frontline to two people and pays out weekly on one of the two legs of your organization.

Breakage: Sales volume generated by you or your down­line for which you receive no compensation.

Breakaway: An abbreviation for "stairstep / breakaway," one of the four major types of compensation plan. It can also refer to a distributor in your downline who has met certain minimum monthly qualifications and has consequently "broken away" from your group.

Breakaway Leg: The organization or downline of a breakaway distributor.

Bonus Pool: A special fund set aside by a network marketing / mlm company, from its profits, and distributed as a special incentive to qualified sales
leaders.

Bonus Volume: See BV.

Business Builder: A distributor who is actively prospecting and gathering customers, as opposed to one who is simply buying product at wholesale for personal use.

Buy-Back Policy: The money-back guarantee offered by all reputable MLM companies to distributors. Generally, companies will pay 70 to 100 percent of the wholesale price on any product that a distributor purchases, but then de­cides to return, for whatever reason

BV (Bonus Volume): An alternate expression for point volume (PV) or business volume (BV). It is a value used by MLM / Network Marketing companies to calculate overrides and commissions, based upon the wholesale price of the items for which over­rides and commissions are being paid.

Circle of Influence: The people who are closest to you and who constitute your warm market. Also, those who might be easily influenced by you because of your reputation in a particular profession or community.

Cold Market: Prospects outside your circle of friends, family, and associates.

Commission: The percentage you earn from the sales volume of your organization.

Commissionable Volume (CV): An alternate term for bonus volume.

Compressed Plan: A pay plan that stacks or "compresses" the bulk of its commissions on the front end.

Compression: When a distributor quits or is terminated, his downline moves up one level, thus filling the empty space he left, and "compressing" the company's downline by one level.

Depth: The number of levels in your MLM / Network Marketing organization.

Direct Selling: A form of selling whereby independent MLM / Network Marketing representatives, working on commission, sell face-to-face outside of an established retail location.

Distributor: A person who contracts independently to sell products or services for an MLM / Network Marketing company.

Downline: All the people recruited as distributors into a network marketing / MLM company constitute that company's downline. Your downline consists of everyone whom you re­cruit, who is recruited by your recruits, and so on.

Drop-Shipping: The practice of shipping product directly to customers from the company warehouse, rather than through an independent distributor.

Duplicatability: The extent to which an MLM / Network Marketing opportunity can be easily mastered by new recruits.

Duplication: The process of replicating business builders in your downline.

Group Volume: The total volume of wholesale purchases made by your personal group in a given month.

Heavy Hitter: A top sales leader in an MLM company.

Home Meeting: An opportunity meeting held in a distributor's home.

Hotel Meeting: An opportunity meeting held in a rented hotel conference room.

Infinite Bonus: A feature that theoretically creates infinite depth in a pay plan.

Infinite Depth: A feature of some compensation plans allowing distributors to draw earnings from deeper levels, below their ordinary pay range.

Leader: A top achiever in an MLM / Network Marketing downline.

Leg: A down line within your downline, usually headed by one of your frontline "Leaders" distributors.

Level: The vertical position of a distributor in your organization. If you recruit someone, he is enrolled on your first level. His recruits will be on your second level, and the recruits of his recruits on your third level.

Lukewarm Market: Prospects who are neither in your warm market nor your cold market, but somewhere in between. Can refer to people whom you have spoken to once or twice or people referred to you by others in your warm market.

Marketing Plan: An alternate term for compensation plan or pay plan. Massive Action: A sustained, one time barrage of prospecting activity. Matrix: A comp plan that limits the number of people on your frontline, usually to two or three. Max Out: A comp plan is said to be maxed out when you have put enough people in place, moving a sufficiently high level of monthly volume, to qualify you for the maximum level of commissions available in the plan.

MLM / Multilevel Marketing: Generally, an alternate term for network marketing. It can also be used to distinguish those particular network marketing plans that permit distributors to draw income from more than one level.

Momentum: The phase of a network marketing company's growth when sales and recruiting begin to grow at an exponential rate.

Monthly Volume Requirements: An alternate term for qualifications.

Multi-Affiliate Program: An affiliate program that allows affiliates to recruit other affiliates and to be paid multilevel commissions on sales of their recruits.

Network Marketing: Any form of selling that allows independent distributors to recruit other independent distributors and to draw a commission from the sales of those recruits.

Opportunity: The chance to join a mlm / network marketing distributorship, or another term for the distributorship itself.

Opportunity Meeting: A recruiting rally or business briefing held by MLM distributors for the purpose of presenting the opportunity to prospects.

Organization: That portion of your downline from which you are allowed to draw overrides and commissions. It includes all distributors placed on levels that fall within your pay range.

Organizational Volume: Monthly sales volume generated by your organization, through product purchases from the company.

Overrides: The monthly commission you receive from your breakaway legs.

Payout: The percentage of a company's total revenue that it pays out to distributors, in the form of overrides, commissions, and bonuses.

Pay Plan: An alternate term for compensation plan.

Pay Range: All levels of your downline from which your comp plan allows you to draw overrides and commissions.

Personal Group: All distributors in your pay range, whom you have personally sponsored, but who have not broken away.

Pre-Launch: The period just before an MLM / Network Marketing company's official launch.

Prospect: A potential customer or recruit.

Prospecting: The process of seeking customers or recruits for your Network Marketing / MLM business.

Personal Sales Volume: The volume of product that you personally sell in a given month.

Personal Volume: The volume of product that you buy at wholesale from the company in a given month.

Point Volume: An alternate term for bonus volume.

Qualifications: Monthly quotas that distributors are required to meet, in order to qualify for a given achievement level. Quotas are usually set in terms of group and personal volume. Occasionally, there are recruiting quotas, requiring that you bring a certain number of people onto your front­line each month.

Recruit: A prospect who has agreed to join your downline as a distributor.

Renewal Fee: A yearly membership fee paid to an Network Marketing / MLM company, in order to maintain your status as a distributor.

Retail Profit: The spread between the wholesale price you pay for product, and the retail price at which you sell it to your customers.

Roll-Up: A feature in some plans stipulating that if you fail to qualify for commissions in a given month, because you did not meet your quota, you are declared inactive, and will receive no commissions from your downline that month.

Saturation: The theoretical point at which a network marketing / mlm company runs out of potential customers and recruits, and stops growing.

Sifting and Sorting: The practice of quickly identifying the most promising prospects and focusing your recruiting efforts on them, while ignoring the rest.

Sponsor: A distributor in an Network Marketing / MLM company who recruits and trains another distributor.

Stairstep: An alternate term for an achievement level, or for a stairstep / breakaway compensation plan.

Stairstep / Breakaway: A type of compensation plan that requires distributors to meet monthly volume quotas, in order to qualify for an ascending series of achievement levels, or "stairsteps." When a distributor reaches a certain level, he "breaks away" from his sponsor's group.

Stockpiling: The practice of buying and hoarding more product than you can possibly sell, usually in an attempt to meet excessive monthly quotas, to qualify for commissions.

Teleconference: A recruiting rally or business briefing that is broadcast by telephone. Prospects are told to phone in at a certain time to hear the event.

Three-Way Calls: A prospecting technique that allows distributors to build a downline while training recruits. When a raw recruit wants to interview a new prospect over the phone, he will 3-way his sponsor into the call. The sponsor gives the presentation while the recruit listens and learns.

Two-Level Plan: Another name for the compressed plan, derived from the fact that many compressed plans stack the bulk of their commissions on the first two levels.


Unilevel: A type of compensation plan in which you must qualify for achievement levels, but in which people in your downline cannot break away.

Upline: All of the people above you in a network marketing / mlm organization. Also, an alternate term for sponsor.

Warm List: A list of personal contacts drawn up by new recruits that constitutes their warm market.

Warm Market: All potential prospects for your business whom you personally know, either because they are family members, friends, or
business associates.

Width: The number of people in a distributor's frontline, or the number of people allowed in a distributor's frontline by the rules of the
compensation plan

Driving Behaviour

It’s not all about the compensation plan
After 5 years of helping companies move into MLM and setting up MLM compensation plans I have come to the realisation that they are “ALL” unique. Every company employs the services of an expert. They crunch number, tweak royalties and bonuses, develop breakage strategies, implement promotion and demotion plans and introduce new “never seen before” mechanisms that are “guaranteed” to send the members into a frenzy of recruiting and selling.

The truth is that the compensation plan is only one small part of what drives a Network and it’s not the most important part at that.

The aim is to design a total program that will drive desired behaviour. The first step therefore is to decide what behaviour you desire.

Companies are divided into two broad categories when it comes to desired behaviour. On the one side you have consumer networks and on the other you have sales networks.

Consumer networks:

In this category the network consumes the companies products and focuses on recruiting. The bigger the team gets the greater the consumption becomes.

Advantages:

• Members join primarily to receive a discount on the products. This provides the company with a loyal, stable and committed consumer base.
• +/- 20% of the network focuses on team building. These members are the ones who start earning commissions from the business.
• A few (two to three percent) will do the hard yards and will build enormous networks. These members are the top earners who are paraded before the masses as an example of what can be achieved.

Disadvantages:

• If the network is not consuming then no one is. Many members of consumer networks have huge teams with little or no volume.
• Your sales are governed by the size of your team.
• Due to the business focus of the team, consumer networks tend to develop an unjustified but prevalent bad reputation in the market place.

An example of a consumer network would be AMWAY or HERBALIFE.

Sales networks:
In this category the network is focused on sales. Their job is to get the products in front of prospective clients and to convince them to buy. Once they have created a new client, they service the client and generate ongoing sales.

Advantages:

• A new network member can generate income from day one.
• A single member can generate huge volumes without recruiting a singe new member.
• Sales can be driven through promotions and incentives.
• They usually have a great reputation due the their consultants who are militantly loyal to the brand.

Disadvantages:

• There is less emphasis on recruiting and growth is therefore slower.
• Sales volumes can dip and spike due to forces outside of your control.

A good example of a sales network would be AVON.

Obviously there are strategies that try to straddle the fence and this is where the creativity comes in. In a bid to get the best of both worlds, company owners get truly creative and in so doing, make the software developer’s life a living hell!

Driving behavior
There are three main mechanisms uses to drive behaviour:

• Compensation
• Recognition
• Incentives

Over the next few weeks I will be looking at these in turn. I will expand on them and provide you with working models of how they can be implemented.