The Top Sales Compensation Plans Of 2016 - Member Content
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In the past, sales representatives traditionally operated with relative autonomy, with motivation coming strictly in the form of a sales commission. These sales reps were left to their own devices, because the more they sold the more they earned.
Over the years, however, the sales world has become more complex, says Jim Pancero, president of Jim Pancero Incorporated Sales and Sales Leadership Training, Carrollton, Texas. Whether this complexity was due to competition from savvy online sellers or from the increased intricacy of the products being sold, the solution was the same — better training from quality sales management.
At the same time, many smart companies — and often the larger companies, says Pancero — have come to realize that good sales management can also be an effective way to provide motivation. With motivation coming from sales managers, the need for a pay structure based entirely on commission disappeared.
Meanwhile, as younger generations have flooded into the workforce, they have shown a greater desire to work in teams and receive hands-on coaching, which made the role of sales managers all the more important, says Pancero. Suddenly, the archetype of the lone wolf sales rep operating on straight commission has begun to disappear.
Decades ago, straight commission was the gold standard of sales compensation structures. It was preferred by both distributors and sales reps alike. Today, however, sales consultants will almost universally say that straight commission is dying. Younger generations are entering the workforce, and they much prefer the stability of a salary-based pay structure. Distributors are also on board with getting rid of straight commission, since salary-based compensation allows sales managers to exercise more control over employees’ hours as well as their sales.
However, the end of straight commission has not come to the jan/san industry — at least not yet. Nearly a third (30 percent) of jan/san distributors surveyed by Sanitary Maintenance say they compensate veteran salespeople via straight commission. This was the second most common answer, behind only “salary plus commission or bonuses” at 31 percent.
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