Commission vs. salary based reps
For some time now, we've been exploring a new pay/
bonus structure for our Advertising Sales staff -
the options being: straight salary, straight
commission, and various algorithmic combinations
of the two with built-in performance incentives.
Here's the scenario: Our two top sales reps (using
the assumption that a pay structure based on straight
commission would mean keeping a bigger cut of the
total revenue that they bring in), asked if the
option was available. Go figure?... Anyways at their
request... I sat down to design a risk/reward matrix
that I felt would justify a rep opting away from a
guaranteed pay check to a straight performance pay
arrangement... at the same time being careful not to
give away the "farm" so to speak.
Anyways, these guys are big performers with what I
like to call annuity accounts (long-term, big budget,
repeater accounts)... which makes my situation tough
:) In my first attempt to calculate a switch to
straight commission I would have easily doubled
their incomes.
Let me clarify, the problem isn't paying them more
money, they're committed performers and they deserve
it (which was why my risk matrix first run-thru
basically doubled their money) ... The problem is
how does the instant doubling of someone's income
without any additional responsibility effect future
performance... can "lazyman" syndrome sent in, where
the reps making the big bucks aren't as hungry for
new accounts, and growth suffers???... and how do we
handle our other reps (current and future) with
regards to salaries??? See the problem(s)? There
can't be multiple standards... or can there? I guess
that's the question :) Anybody?
Received on Wed Feb 20 2002 - 23:10:25 CST
