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Are Sales People Coin-Operated?
by David J. Cichelli
Are sales people coin-operated?
A quick and convenient answer would be an affirmative, “yes.” However, upon closer examination, this common refrain hides some revealing observations. We suggest here that these hidden observations, once considered, will lead compensation designers to better sales compensation solutions.
What Does “Coin-Operated” Mean?
At face value, the expression “coin-operated” suggests that sales people respond only to pay incentives, which sales management uses to manipulate sales personnel actions. It also implies that the sales force is somewhat immune to other forms of managerial oversight. “Unless it’s in the pay plan, it won’t get done.” Further, it suggests a negative view about sales personnel and their professional values. At best, it implies sales personnel are self-absorbed, not concerned with serving the best interests of the company, and will only perform if bribed into action. This moves incentive compensation into a marquee sales performance role, a dubious location.
But Sales Compensation Works, Right?
Yes, it does work. But the simple phrase “coin-operated” relegates sales people—their ambitions, their character and their intellect—as subordinate participants in a Skinnerian science experiment...by offering a bigger block of cheese to make them run faster. This represents a painful and flawed view of sales people (not to mention of mankind in general).
A better starting point is to understand why sales compensation works. There are numerous motivation theories that explain why people do what they do. (See author’s notes about motivation theories.) When viewed collectively, these theories suggest people’s actions are driven by one or more of the following factors:
- Economic. Sure, economic reasons drive a lot of behavior. Defining the word “economic” broadly allows us to include not only money, but also health protection, security, wealth, physical safety and purchasing power. Sales compensation payments are a natural fit for this factor, but not universally. Sales compensation payments, for example, do not fully satiate the need for security and physical safety.
- Social. When people think about and act upon what others think about them, we are tapping into their social psyche. As a general rule, most people want to receive positive recognition and live in harmony within their social environment. People gravitate to actions that earn themselves positive feedback and avoid performance that garners negative feedback. Measurement (with or without money) is a compelling social lever. For some people, their tribal instincts make them eager to conform to the social norms of a sales team, for example.
- Self-Construct. Often cited as the “wild card” in human behavior, a person’s “selfconstruct” provides an inner voice that answers the question: “What is right for me?” Self-constructs can be enduring, maturing or ephemeral. An important component found in self-constructs is the pursuit of self-accomplishment.
Each of these factors meanders and crisscrosses each other, then doubles back. The point is: No matter how much we want to, it’s not easy to reduce humans to a presumption; this includes sales people.
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Comp Doctor Archive
David J. Cichelli
The Alexander Group, Inc.
dcichelli@alexandergroupinc.com www.alexandergroupinc.com
David J. Cichelli is Senior Vice President of The Alexander Group, Inc.®, the nationally recognized leader in sales effectiveness consulting. As the National Practice Manager in Sales Compensation, David provides thought-leadership and best-practice solutions for application of winning sales compensation solutions. He is a frequent speaker at national conferences, industry groups, and corporate meetings. He is the author of WorldatWork's (association of compensation professionals) sales compensation design seminar. He is author of McGraw Hill’s book Compensating The Sales Force. He has presented sales programs throughout the world including Asia, Europe, and South America. He is a contributing editor to “Sales & Marketing Management” magazine. He is the author of many articles on sales effectiveness and sales compensation. With over 20 years of consulting experience, David's clients include leading companies from among most major industries including financial services, hi-tech, software, telecom, wholesale, consumer goods, healthcare, and many others.
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