Sales Compensation: Pay For Performance?

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I read a blog the other day that asked the question, Is sales even a profession? The author’s opinion is that formal sales education and defined qualifications are the key to gaining the proper recognition of sales as a profession. While I agree that a sales education is an excellent goal and worthy enterprise, education alone is not going to make selling a respectable profession on a par with doctors or teachers or even bureaucrats. (We’re probably more respected than politicians, but I wouldn’t be too proud of that.) In many cultures, sales people are viewed as everyone who couldn’t get a real job, a “those that can, do – those that can’t, sell” mentality.

I don’t get that. In my opinion, everything is selling. Everything. We all do it every day, and the quality of our lives depend to a great degree on how good we are at it. You get a better job when you sell yourself to a new employer. You get a desirable mate when you convince him or her that you are the best option. You get the warning instead of the ticket when you convince the cop that there was some mitigating circumstance. Even your education is selling. You know your product (the subject you’re studying) and you pitch it well (tests and discussions).

OK, so some of this is a stretch. Love-at-first-sight has nothing to do with selling. That’s good packaging, and that’s part of marketing. But love-at-first-sight just gets you in the door – you still have to close the deal, and that is selling.

So why is selling as a job not respected? I’m going to annoy some people here.

Because people think we’re paid by results, and not by effort. And we often are.

Your surgeon doesn’t get a bonus if you survive the operation. Your teacher doesn’t get a percentage of your earnings. Your lawyer gets paid by the hour, unless he’s into contingency payments. And guess which branch of the legal profession has the worst reputation. Yes, personal injury, where lawyers get paid only if they win.

This is an odd situation. On the surface, pay for performance seems to be the fairest way to compensate someone. If I succeed, I get paid. If I fail, I don’t. There is some motivation there. Think about your next experience at the Department of Motor Vehicles if the people there were paid for success instead of for hours worked.

The problem is that ambitious people will figure out how to game the system. How do you define success at the DMV? Number of driver’s licenses issued? We’d have some even scarier drivers on the road if that were the criteria. And many sales people game the system by selling for their short-term benefit, not the long-term success of repeat buyers and good reputations.

There is the challenge for sales management – compensation programs that get you the behavior you want and the results you need. Two things often at odds with each other.

We’ll have some more on this in the future. In the meantime, check Lee Salz’s article today on sales metrics management for some ideas on measuring for behavior.

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