11/17/2020 1:34 pmCommission Based Salary and Management Motivation
Companies are made up of individuals. When you hear a company’s staff being referred to, you will often hear them called a “team.” But are they really a team? Sure they work for the same company, they are working at the same time, and they work “together,” but are they really working together? Do they all have the team or company’s best interest in mind? Or are they just there for a paycheck?
Most people work because they have to. Most people’s driving motivation is financial. Some jobs pay hourly, some jobs are salary, and some jobs are commission-based. People will argue the pros and cons of each financial set up. However, commission-based salary results in many unanswered questions.
When it comes to the idea of commission, many people have mixed emotions. On the one hand commission helps to motivate the seller. On the other hand, commission leaves the seller’s wallet at the mercy of the buyer. For a sales representative, commission can mean a large paycheck one month and relatively small paycheck the next month. It comes down to whether or not the seller is on their “game” and amiable, but also to the buyer’s state of mind. Commission also brings about the question on ethics in regards to co-workers. Who should get the commission if more than one person works with the customer? Who should get the commission if the customer asks for a certain representative, they are unavailable, and another representative makes the sale?
Referring to the later, many people would feel that the person making the sale should get the commission. Sure, the customer asked for a certain representative, but that representative was unavailable. Commission is meant to reward the person who works with the customer and closes the deal. Yes, in some cases, a customer may have worked with a certain representative whom they like before, so they want to continue that relationship. However, if that representative is not there to make the sale, why should they get credit for it?
Considering this discussion from a different view, one may argue that if the customer asked for the representative by name, then the representative must have put in the work previously. The representative whom the customer asked for, set the customer up for the sale, how else would the customer know their name? Commission is very much based off client rapport, and clearly the representative who the client asked for succeeded in that aspect.
A commission-based salary is a great way to motivate employees. That being said, it also a great way to divide teams. As far as productivity goes, a divided team is not ideal. A divided team does not work together. This can cause internal conflict amongst the team. Jealousy and envy can result in bickering, tension and staff turnover. An unhappy working environment is an unproductive working environment.
Alternatively, team commission is a great way to unify a team. Everyone benefits from each other’s success. Team commission can foster an environment of growth. Employees will want to help each other succeed because they know that they themselves will also benefit. When it comes to team commission internal competition can be a good thing. Employees will be more likely to enjoy competing when it comes to sales because they know that ultimately, they will not be losing anything if they do not come in first.
What motivates a team? And what motivates an individual. Overall, one could argue that one and two are the same. However, are motivated individuals as productive as a motivated team? The answer is quite simply no. Motivated individuals do not have the big picture in mind. Motivated individuals do not care if the team or if the company succeeds as long as they come out on top. A motivated team takes it upon themselves to make a project or a company their own. A motivated team understands that the success of the project or the success of the company is the same as their own personal success.
Management must be careful to have a healthy balance between team commission/ reward and induvial commission/reward. It is management’s responsibility to create an environment which will result in productivity, growth, and longevity. Management should be sure to reward outstanding employees but not so much that they isolate them from the rest of the team. Management must also be careful as to not reward unproductive employees by always rewarding the team.
Regardless off if one is discussing team commission or individual commission, for it to be successful, the product has to be believed in. Customers know when an employee does not believe in what they are selling or promoting. Again this is on management to ensure that their staff truly knows why their product is beneficial or superior to the competition. Management must lead by example and let their staff know that they are emotionally invested.
There is no one size fits all when it comes to solving these management and culture questions. What works for one company may not work for another. Knowing the team and knowing the staff is crucial to management’s success. Keeping an open mind and knowing that no one person has all the answers is a necessary trait. Companies change and grow and as they do, so do employees and the team culture. Motivating the team and coming up with new ways to enhance productivity is half the fun of a management position.
Michael LaMarque was born and raised in Holliston, MA. He attended Holliston High School and graduated with high honors. In high school, he was captain of the football team and played linebacker. He also played defense on the lacrosse team! He attended Bridgeton Academy for prep school, where he continued to play football. He also continued his academic excellence making the Dean’s list. He later attended Quincy College, where he was on the Dean’s list once again, and earned his Associates Degree in Natural Science. He went on to attend The University of Massachusetts Boston, where he again was on the Dean’s list, and majored in Management.
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