Sales Commissions May Not Be the Best Incentive to Your Sales Department

Yes, paying sales commissions is the standard. Almost every sales department has such an incentive. But, is it really the best way to go?

If you have trained your sales force well and given them the tools they need to succeed, it may be more effective to remove sales commissions and pay quarterly bonuses based on personal success, team success and company success. This way the star is not performing for himself only, and is not the glory-hound we all know. The average producer who works hard, does his best and performs well (but not at the all-star level) will not be left behind in a bonus system.

Bonuses produce teamwork and greater cooperation which means better service for the clients and more respect for the company's goals and objectives. They also allow you to reward individual successes and to create a real team effort where people learn to work together for a better result--- a result in everyone's best interest. Thus, if we reward salespeople for their individual efforts, their team success and the company's success, we get a much better result than by simply paying commissions for sales made individually.

This approach still allows you to reward individual success but it de-emphasizes the specific sales volume while emphasizing overall success... that's good. Think about it. I have long said that I would rather have a sales team of hard-working average sales people working as a team than a sales group with a few hotshots and the remainder feeling left behind, unimportant and earning a lot less. The overall results are never as good.

This is not to say that I want to reward mediocrity. I do believe, however, that teamwork and company commitment as well as individual success are collectively better benchmarks for measuring and rewarding success than commissions that only reward sales.

Think about it. Try it, it works.