Developing Business Acumen by Jennifer Currence

Author:Jennifer Currence
Language: eng
Format: epub
Publisher: Society for Human Resource Management
Published: 2016-01-15T00:00:00+00:00

HR Implications of Keeping the Right Person

One thing specific to a sales environment that is key for HR to assist with is sales compensation plans. Each industry is different. Some sales-people are paid on straight commission. Others are paid on straight salary. Most common is a combination of the two, but finding the right blend is critical.

If you are creating or revising your sales compensation plan, look at what’s popular in your industry as a starting point. It would be difficult to recruit a salesperson to your company on straight commission when the rest of your competitors are paying a compensation that’s mostly made up of salary.

In addition to compensation, almost all sales positions have the opportunity to earn a bonus based on performance. Sometimes this is embedded in the commission plan. Other times it is structured more like a profit sharing plan. And some companies offer an extravagant all-expense-paid trip to reward top producers. Deciding how to reward your sales force employees is crucial. You want to stretch them to do their best, but you don’t want to make the goal unobtainable. Ensure that your bonus plan is objective and transparent. Consider implementing a dashboard so all employees can see where they stand and can support others’ successes and assist with their challenges. However, be conscientious of the environment you are creating with your bonus plan. In his book The 7 Habits of Highly Effective People,3 Stephen Covey relayed a conversation he had with a sales manager who couldn’t understand why his staff was so competitive with one another when he was trying to instill a collaborative team environment. Dr. Covey pointed to the wall of the manager’s office, where each sales person had his or her own race horse, openly displaying a race to the finish line, in which only one employee received the top bonus. Be careful about creating unintended consequences.

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