“I don’t understand why my manager doesn’t do something about the salespeople who don’t give a crap and why I don’t get a raise for carrying this team?” ~ A real conversation from this past week.
Sales compensation can be a tricky issue. Depending upon the selling cycle, the selling process, the product, margins, sell price, etc., there are many ways to compensate salespeople. The bottom line is that your compensation program must:
- Reward the behaviors that you expect of your growth team. ( Part 1)
- Be financially advantageous for both parties. (Part 2)
- Be balanced toward who is taking on the most risk. (Part 3)
- Provide the education, development, resource and management support necessary to facilitate growth. (Part 4)
The end of this story focuses on how I changed the perspective and the attitude of this particular growth professional. Obviously frustrated by a management issue, this person was annoyed with the fact that they were leading the team in sales by a significant margin and feeling like their efforts were not being rewarded. Worse, they were more dismayed that the lack of effort by others was not being effectively dealt with. That is the risk you run with salaried people in combination with poor managers–growth professionals can, and will, coast.
The solution to this particular issue is not a raise. For a raise is merely another increase in fixed cost. It lowers the risk for the growth professional and rewards current behaviors while not insuring for good, future behaviors. The solution is an added incentive, or bonus, for hitting significant stretch revenue target. By adding a performance incentive into the mix, the driven professional will go for the extra money. In this scenario, the business only has the risk of a variable cost profitably linked to increased sales. Everyone wins. The growth professional can “earn” a raise, the company has effectively incentivized for exceptional results, and their is no added risk on either side. Of course the management issue for the poor performers has not been addressed yet. Save that for another day and a future blog.
Dave Cooke has recently launched his program the Sustainable Revenue Formula™ (SuRF), which provides businesses a comprehensive formula for effective and sustainable revenue growth. If you are interested in obtaining a copy of the white paper, “Revolutionizing the Future for Today’s Business”, please contact me: dave@salescooke.com.