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CompensationMaster Newsletter Article, January 2002 Your top producer isn't happy. There's no question that she
does a great job—last year she closed twice as much business as your second
highest producer. But she just told you that she doesn't think her compensation
reflects how valuable she is to the company. She said she's thinking about
leaving for a better offer. What do you do?
Most sales managers wouldn't think twice about making an
exception to their normal sales compensation plan for her. But is that the
right answer?
Here are some questions to ask before
you decide:
1. Are we making money on her sales? Most sales managers assume
that high volume equals high profit. But that's not necessarily the case. Many
top-producing representatives negotiate high commissions and perquisites that
can actually have the company losing money on every sale. If that's the case,
you may decide that you want the volume anyway, but realize that you'll have to
make up the profit elsewhere.
2. Is this really about the money? Remember that although most
sales representatives say they are leaving to make more money, so as not to
burn their bridges, the actual reason is more likely personal issues or a
conflict with management. Maybe there's another way to solve the problem.
3. How will other members of the sales force react when they
find out? Don't kid yourself—even if compensation plans are supposed to be
confidential, word will eventually get out. Making exceptions to commission
structures is one sure way to damage your relationship with your sales
representatives. You may keep that one person, but if other valued members of
your sales force feel they haven't been treated fairly, you'll lose more.
4. Are there others in a similar position to your top producer?
Instead of making exceptions, the answer may be to introduce a choice of
compensation plans. You might tailor one plan specifically to the needs of your
top-producing representatives, and make it available to everyone who meets
certain targets. That way you motivate others to reach the same level, instead
of discouraging them.
Making exceptions to your compensation plans is never a good
idea. It destroys the trust you've built up between you and your sales people.
Take the time to analyze the situation. It is almost always possible to come up
with a better solution.
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