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When does a "Confuseopoly" cause a
"Commissiondectomy?"
Whenever a company needs to roll out a new compensation plan for salespeople.
Why? Read on....
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Comp Plans We All Hate
This causes two problems for owners and senior executives.
- Pay dissatisfaction leads to high turnover
- Overcompensation steals money from lead generation, marketing, & sales development
Is there a way to make everyone happy?
Compensation Isn't That Important?
Every survey conducted on employee motivation and satisfaction rates compensation as only fourth or fifth most important in driving job satisfaction.
Here's a recent survey on workplace motivators conducted by the
McKinsey organization:
1. Challenging Work
2. Recognition
3. Employee Involvement
4. Job Security
5. Compensation
Aren't Salespeople Coin-Operated?
Most salespeople are content to complain quietly to themselves about the injustice, unfairness, inhumanity, inequality, illegality of their sales compensation.
That is, until you try to change it!
Creating a Confusopoly
A great way to prevent salespeople from easily comparing their comp plans is to create so many
 factors, levels, accelerators, and classes of sales, nobody can understand the plan, let alone compare it.
Cell phone and health insurance companies have been using this strategy with great success for years.
"A Commissiondectomy"
Take a look at three actual comp plans, See if you can tell which one pays the most. (a "Threshold" is how much you need to sell BEFORE you get commission). You can't, because each one will pay the most under certain scenarios.
A Confusopoly is a perfect starting point for Phase II of a compensation change, the "Commission-dectomy". This term was coined by Robert Ringer years ago in his book "
Winning Through Intimidation".
A proper Commissiondectomy is a bloodless operation by heartless executives targeted at helpless salespeople. This happened to
 me years ago when my boss gave me my new comp plan and quota with the statement "Mike, you'll make a lot more money this year, but you'll have to sell more to do it". I thought this was great, until I realized he had just cut my compensation by 5%. A textbook Commissiondectomy.
What Really Counts
Take a look at this soldier below. As a new recruit, this person will work 80 hour weeks in grueling conditions, get screamed at by Drill Sergeants, crawl through mud, rain, snow, and risk his life. All for less than $30,000 per year. You think you've got it bad?
Why do millions of Americans do this? Because they see a greater purpose, a cause, and value in what they do and how they contribute.
Organizational Communication
The Harvard Business Review
study referenced in the beginning provides the key for both companies and salespeople. The "perception of fairness" is more important than the amount itself. In other words, it's a public relations issue. To create the perception of fairness, the company needs to:
- Share the overall company mission
- Explain why the comp is what it is
- How it leads to the salesperson's career goals
- Factors that will lead to total comp growth
As we turn our attention in the new year to our new comp plans, let's keep these things in perspective.
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WEBINARS
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Here is your chance to see if you are as smart as you think you are.
Think of a difficult or impossible Sales Management problem. Enter it into the question box below.
Mike will provide deep insight into your dilema, based on his 25 years of Sales Management experience. Or not. It depends on how silly the question is. E-Mail Mike at:
Mike@Trans4mers.net
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If you've made it this far, thanks for reading. If you are just looking for the "unsubscribe" option, it's below.
"Carpe Dinero" = Seize the Money.
Sincerely,
Mike Schmidtmann
(703) 408-9103
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Feel free to SWIPE* any ideas you find useful, and "pay it forward!
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