sales pay plan

You Changed My Sales Pay Plan?

By Chris Lott | Management, Sales | 166 Views | 2 Comments    

You survive the multiple interview processes for a new company sales position. They choose you out of the many that applied. Pumped, you now go over the pay plan presented and like any sales professional worth their weight in salt figure how to make money using it. Good money. So you put the plan to test and you start nailing it. As a matter of fact you’re blowing away your quota and hitting major bonuses! Pat on the back and kudos are made. For a time things are awesome. Then you hear the rumor at the end of the year that there might be some changes made. And, sure enough, before the first of the new year you’re presented with a new sales pay plan change. What the heck?

 

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They sit you down and present what the owner and/or managers tell you is a better program. Of course you’re no fool and realize quickly you will have to do more to make the same or possibly less.

For the Sales Pro: Why a sales pay plan changes.

Because you’re making “too much” of course! They simply don’t think you’re worth the money they’re paying out. In some cases you might be making more than the owners salary and that simply won’t do. So they devise a new program that helps them pay you less under the guise that it would not be true. Commission caps, claw back rules, base salary reductions with complex commission percentages and tiers… the changes go on and on.

Many of your peers will take the new plan and try to make the best of it. In some cases they succeed. Unfortunately, the owner/manager sees his/her decision of change successful and decides to adjust again as the payroll is indeed decreasing. Good business. Or is it?

For the Owners/Managers: What really happens when sales pay plans change.

No matter what a sales person tells you, and even if they take the new plan and run with it, they are not happy. They feel they have been cheated. Dusting off the resume and LinkedIn profile most likely will pursue and contacts asked to “keep their eyes open” takes place. You now have a distracted, less than loyal, sales professional.

Top sales pros eventually get tired of the changes and move on. You hire new sales people which at first seems great. I mean, they don’t know that there was a better plan before so a good thing, right? The reality is you now are hiring a lesser salesperson that is willing to work cheaper. Not always, of course, but many times. I have seen this first hand.


A cellular company did exactly what I have described above. They had a great plan that great salespeople could make great money. Their sales teams were evangelists for the company. Then they started making changes to the sales pay plan and many talented folks left. When visiting their store I have felt and seen the difference in attitude and professionalism change for the worse over time.


So now as a manager and trainer you have to continue to work with a high turnover sales department. Anyone that has been in this position before knows it’s frustrating, costly and not conducive to a healthy bottom line many times.

My advice to both.

I understand that there are times to save a business changes are needed. Not sure cutting the only “money generating” organization is the place to do so. Here’s a little advice for the sales professionals and owners/managers.

“I can’t change the direction of the wind, but I can adjust my sails to always reach my destination.” – Jimmy Dean

For sales professionals, I would not work for someone that is always changing your sales pay plan. Life is just too short to put up with that shenanigans.

For the owners and managers that feel entitled to make changes please think about all the repercussions that the change could make. I promise you when you do you will probably rethink the change.

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2 thoughts on “You Changed My Sales Pay Plan?

  1. Hi Chris! Yep, been there, done that a bunch. And, over my 40+ year career, I never saw it work well for either side, not once. Perhaps that is why so many so-called sales professionals deride commissioned salespeople these days. They can’t hack it anyway and think they are just lucky to keep their jobs when management makes comp plan cuts that take away the incentive for top performance and reward mediocre production.

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