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
Connect with me on LinkedIn!
©2021 The Alexander Group – All Rights Reserved – Issue No. 200321
READ ALL ISSUES:
Sentinel Charts to Monitor Programs
Sales Comp: Linked Formula Design
Sales Quotas: Friend or Foe?
Sales Comp: Breaking the Rules
New Fiscal Year Sales Comp Plan
Sales Force Trends
Test Your Knowledge
You Can’t Hide From It
Getting the Mix and Leverage Right
2021 Sales Comp Hot Topic Findings
Should Reps Be Paid on Profits?
Sales Comp Starts With Job Design
Sales Compensation Victims
Global Sales Compensation
Are Salespeople Coin-Operated?
2021 Sales Comp Trends Findings
Is Sales Comp Just for Sellers?
Sales Comp: Rewarding Sales Profits
Pay Equity and Sales Compensation
2021 Sales Compensation Planning
Avoiding Common Misunderstandings
2020 Sales Comp Hot Topic Findings
What COVID-19 Found in the Shallows
Best Revenue Recovery Solutions
Save the Sales Force
Sales Seek to Protect Incentive Pay
Should You Protect Sellers’ Pay?
Use the Right Measures!
Are Comp Plans Industry Specific?
Careful About That Threshold
Commit to the Money, Not Mechanics
Should You Change Your Comp Plan?
Are sales comp costs variable?