A Smarter Way To Think About Sales Commissions

By Ian Chan (Baseline – Base CRM Blog)

One of the business world’s oldest traditions, the practice of paying commissions to sales teams, is under scrutiny.

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These days, conventional wisdom is under attack, and explaining key business decisions with ‘it’s just the way it’s always been done’ doesn’t cut it anymore. One of the business world’s oldest traditions, the practice of paying commissions to sales teams, is under scrutiny. And it’s probably crossed your mind at least once — is motivating my sales team with commissions the best thing to do?

Those who argue against commissions believe that treating salespeople differently from the rest of the team results in a lack of unity and employee loyalty. Paying commissions is viewed by this camp as a divisive practice that discourages teamwork and encourages short-sighted goal setting and thinking, de-incentivizing employees from pursuing long-term relationships with customers in favor of inflating sales metrics for the month.

One author claims the idea of paying commissions relies on an outdated theory of employees needing to be controlled, coerced, punished, and lavishly rewarded in order to perform; comparing the idea of paying commissions to sales teams to an S&M dungeon.

We disagree. […Continue Reading…]