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Sunday, 16 May 2010

One Size Fits All? Not Always!

It is with some pleasure and not a little surprise that I find comments on my blog as well as emails commenting on the content and, in one particular case recently, asking me to comment on a related subject. That I am happy to do, so here goes and thank you Pat!

Pat suggested that some thoughts on the best way to incentivise a sales force would be helpful and I must confess that I have fairly strong views on the subject. The best sales force I worked in was around 120 strong and had no commission structure whatsoever.

Remuneration was probably above the norm for an engineering sales force and it was managed and motivated in the classic Herzberg manner of providing encouragement, reward (non-financial), achievement and recognition. The primary reward, as commended in Will and Kenneth Hopper's book, the Puritan Gift, was that of promotion for performance. Very few, if any, of the sales force were recruited from outside the business and none at all were brought in to management positions, of which there were several throughout the UK.

The problem with the "one size fits all" approach to sales remuneration is that it absolves management from having to understand the personal needs of each individual and assumes, wrongly in my view, that everyone is motivated by earning more money through their efforts.

I well recall one salesman who, when we changed the company car supplier for a better deal, said to me in horror "What will the neighbours think if they saw THAT on my drive?". His motivation seemed to be that a better car indicates status and he left the company in high dudgeon.

At the same time another salesman, whatever pressure we put on him, would only earn 10% commission every month. When we discussed it with him he said that he looked upon commission as "holiday money" and was quite satisfied with 10%. We had to point out that the company wasn't necessarily satisfied but it had no effect.

Commission schemes can be used not as a carrot but rather as a stick so that if people don't earn enough (in the company's opinion) then they are not performing and action has to be taken. How ludicrous is that?

Ideally each individual needs to decide precisely what rewards he/she would like to see given for great performance. One idea mentioned by my friend Jim Pratt, a Chairman and speaker from Vistage USA, was to ask one of his sales force precisely that question and was surprised that he said that he wanted a double bed on his boat (he was in California so that explains it to some extent).

Jim said that he didn't think that was much of an ambition until the salesman said "Ah, but I can't fit a double bed on my boat". That led to a discussion of the size and cost of a new boat and a deal was struck as to what he would need to earn next year to achieve it.

I know full well that the naysayers will make the point that to do that for a large sales force is impractical but if in some way a route can be taken that will accept that people are different, their needs are different and they are motivated by entirely different factors, then perhaps the "one size fits all" concept, as modified, can be made to work effectively.

For more information visit www.maa-uk.co.uk or email to ivan.goldberg@maa-uk.co.uk

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