Diversify commission tactics

By Brian Thompson,

Sales commissions and merit increases are well-established parts of the modern American workplace, but those rewards aren't the only motivating factors for strong performance. According to the Harvard Business Review, sales and finance organizations tend to treat commission practices very differently. While sales executives tend to look for ways to creatively get their teams to out perform one another, promising vacations or other elaborate bonuses, financiers are more likely to treat commission practices like another account to manage. They often set caps on commission rates or offer flat bonuses so commissions rise and fall with company performance. Instead, some successful companies have found more refined ways to motivate employees.

Diversifying commissions
Innovators in the field have found that treating sales performance management like a diverse investment portfolio is the best method for motivating employees. According to Forbes, merit increases and general commission rates can easily become a point of contention if they are not carefully thought through. By thinking of the workforce as broken up into distinct groups and individuals with their own needs, companies can be more effective in bringing out employees' best work.

Rewarding more than just those at the top
Stars of the company are important in creating successful businesses, but they are not nearly as important as the core workforce. While they may not be individually raking in outstanding sales numbers, core workers are vital to a business, as they represent the majority of workers - a majority without which companies cannot survive. It is important to reward these individuals in order to keep them performing strongly and efficiently. 

Treating organization as a means to success
Although approaching company commission rates on an individual and diversified basis is more effective, it can also lead to confusion and turn divvying out commissions into a separate full-time job. In the wake of the evolving culture around commissions, many companies are now investing in sales performance management software to help them further the success of their businesses. 

Add new comment

About the author

Brian Thompson