NonCommission Sales Compensation – Is this Blasphemy?
By Michelle Malay Carter on August 24, 2009
Show Me the Logic
Should sales people be held accountable for their effectiveness (which includes?output as one input)?but their managers ultimately accountable for their output.? This is the standard of accountability that I have proposed be used for all employees.? If we held sales people accountable to the same standard as all employees, does it make sense to pay them any differently?
My colleague, Craig Tamlin,?with PeopleFit Australasia has written an article proposing non-commission based sales compensation.? Read his article here.
I’m OK.? You’re OK.? What do you think?? Do sales people rate another system?
Filed Under Accountability, Employee Engagement, Felt Fair Compensation, Requisite Organization, Strategy, Talent Management
Comments
6 Responses to “NonCommission Sales Compensation – Is this Blasphemy?”
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Well!…. Pretty good summary and on face value as 20 year sales person I can’t argue with the logic. However, as you know logic is not persuasive, only emotion is and that’s the point. Commission doesn’t necessarily need to be $ values if just needs to be more than the ‘norm’ because the emotion needed to motivate people to do the job is greater than the ‘norm’. Well that’s my argument not particularly logical but emotional.
Hi Rob,
Thanks for the comment. Why do you suppose sales people need more motivation to work than others?
Michelle
It’s to do with the highs and lows of the job, expectations placed upon sales people and the lack of security. This all leads to the strangest existance. Your value fluctuates dependant on many outside factors.
Doctors get better and better as they grow inexperience, and are therefore paid more and valued more. This is not always the case with most salespeople. In short there is so much variability that there has to be something more than a career/ job satisfaction etc. BTW I tend to be talking about New Business which of course is the hardest place to sell.
Hi Rob,
Thanks for clarifying. I agree with the variability and fluctuation comments. Those things would be removed in the system Craig Tamlin is offering. The lows wouldn’t occur, but then neither would the highs. The sales people would be judged upon effectiveness (of which one piece is output or “sales volume”), but it would not be the sole factor.
Regards,
Michelle
I’d like to see what the sales people look like in a model like that. Again its all about the emotion of the job (new business I mean). You’d probably find the sales people in a model like this would be farmer types not hunter types? I have no evidence for this just a feeling and experience of working with the different sales types.
Hi Rob. So many sales roles call for a “hunter”, yet the true hunter is often cast adrift, left to work out for themselves what to hunt for, how to hunt, then once they have their prey, how to bring it in and share the spoils! I’ve seen so much variability in organizations’ contribution to getting the right deals, and getting the most value from the hunter that it becomes more like pot luck than generating emotion. I have seen more disincentive with the poorly concocted sales plans than sparking the true positive emotion that gets people selling.
True “flow” in a sales role, and therefore repeated success, comes from getting the results with the support of the organization. You don’t have to be paid on results to derive great pleasure from the outcomes.
In fact, a hunter would probably be pleased, and will deliver better results not having to worry about maximizing commission in every sale he turns his hand to. He can do the right things for the business, unselfishly.