A quick and convenient answer would be an affirmative, “yes.” However, upon closer examination, this common refrain hides some revealing observations. We suggest here that these relevant factors, once considered, will lead compensation designers to craft better sales compensation plans.
The expression “coin-operated” suggests that salespeople respond only to pay incentives, offered by sales management to manipulate sales personnel actions. It also implies the sales force is somewhat immune to other forms of managerial oversight. “Unless it’s in the pay plan, it won’t get done.” Further, it suggests a negative view about sales personnel and their professional values. At best, it implies sales personnel are self-absorbed, not concerned with serving the best interests of the company, and will only perform if bribed to do so. This moves incentive compensation into an overrated marquee sales performance role, a dubious location.
Yes, it does work. However, the simple phrase “coin-operated” relegates salespeople—their ambitions, their character and their intellect—as subordinate participants in a pay reward program. This represents a painful and flawed view of salespeople.
A better starting point is to understand why sales compensation works. There are numerous motivation theories, which explain why people do what they do. When viewed collectively, these theories suggest that one or more of the following factors drive people’s actions.
Each of these factors meanders and crisscrosses each other, and then can double back. The point is: No matter how much we want to, it’s not easy to reduce humans to a motivation presumption; this includes salespeople.
Now that we know sales motivation is much more than pay rewards, we can correctly calibrate the use of sales compensation. Here are some principles of sales compensation effectiveness that have served others well.
Sales compensation is an effective tool to complement management practices; it’s not a substitute. And, for goodness sake, never presume sales personnel are coin-operated humanoids
Sales Compensation Educator, Author, Speaker
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©2021 The Alexander Group – All Rights Reserved – Issue No. 200321
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