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Why Must You Pay Sales People Commissions?

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Re: Why Must You Pay Sales People Commissions?

#51

Post by chii »

jetsnoc wrote: post #42
JamesBarney wrote: post #16

CEOs tell everyone if you want great CEOs you gotta pay them. If you wanna great salespeople you gotta pay them. You want great devs. You should put in a ping pong table and give out free soda. The myth that great developers aren't interested in compensation is terrible for our collective pay.

Nailed it. A commission structure is key when it comes to sales and a good one puts all of the right motivators in to all of the right places. It keeps them hungry, selling more, and they are motivated to structure deals and sell the product. Devs, the very best ones, don't want to punch a time clock either and they aren't a production line. We want to build good reliable products that are sold and ultimately used by…

> A good balance of 'Smart, Get things Done and Doesn't Jeopardize the entire business by building crap' must be handsomely rewarded and free beer doesn't cut it.

Those who do are called founders. It sucks, but the reality is that if you aren't an owner, you don't get rewarded.

Re: Why Must You Pay Sales People Commissions?

#52

Post by ericfrenkiel »

iaabtpbtpnn wrote: post #45
ericfrenkiel wrote: post #33

Earlier quoted context omitted.

Having empathy for fields outside your own is exactly why this article is written. It sounds like you only have a single perspective, which is fine, but having more perspectives would help you move beyond being so rigid in your thinking.

The parent didn't display any rigidity of thinking, they simply criticized your inaccurate characterization of engineering work... a point which your non sequitur reply does not address.

> By comparison...

is the operative phrase.

Your fallacy is conflating engineering work and an individual engineer's scope on said work.

Projects can fail, engineering teams can face delays - all common things. But an individual engineer is very unlikely to lose his/her job over it, in contrast to a sales person missing on his/her quarterly number repeatedly.

Re: Why Must You Pay Sales People Commissions?

#53

Post by [deleted] »

ericfrenkiel wrote: post #15

Sales people earn commission because their work is "non-deterministic," meaning they could execute a perfect sales strategy to win an account but the opportunity could still fall through for circumstances beyond the rep's control (budget is yanked, project is delayed, etc.) By comparison, an engineer's work is "deterministic" in that is fully under his or her control to complete the goal. Sales is a risky job and it'…

[deleted]

Re: Why Must You Pay Sales People Commissions?

#54

Post by RcouF1uZ4gsC »

JamesBarney wrote: post #16

CEOs tell everyone if you want great CEOs you gotta pay them. If you wanna great salespeople you gotta pay them. You want great devs. You should put in a ping pong table and give out free soda. The myth that great developers aren't interested in compensation is terrible for our collective pay.

You don't see CEO's being CEO's in their free time. Nor do you see sales people selling stuff just for the fun of it. With open source, developers will spend time and effort building very valuable stuff for free. This perpetuates the perception that programmers like programming so much they would do it as long as their living expenses are met.

I honestly think open source has depressed the wages of programmers. Linux probably has generated billions of dollars of value, but it has not really accrued to the programmers. In addition, open source allows companies to get very valuable intellectual property without having to write it themselves or buy it from someone. Basically it devalues the cost of software and there the value of programmers.

Re: Why Must You Pay Sales People Commissions?

#55

Post by ThomPete »

calinet6 wrote: post #6
ThomPete wrote: post #4

Earlier quoted context omitted.

You have to find a way to measure it though. As long as you can't that it doesn't matter if there are a more holistic way to think about it (my guess is that there are but it requires a lot more data pick-up-point)

Do you though? At an individual level? The only measurement that matters is profit, which is pretty easy to measure.

What matters is who creates profit which is easy to measure by their paycheck. What I was saying was that if want a more holistic way to approach it you will need to find a better way to measure who is involved in the sales process.

Re: Why Must You Pay Sales People Commissions?

#56

Post by OtterCoder »

Swizec wrote: post #39
sidlls wrote: post #5

I like how he inadvertently admits that engineers are compensated less well in part because they mistake their jobs for something fun they'd do anyway.

I would totally write code for fun and I do! But engineering ... that shit ain’t fun. Most of it is monotonous and boring and rife with managing process and people and working around things you built 2 years ago that no longer fit but you don’t have time to change. For every hour of coding, I am rewarded with 2 hours of engineering. Bleh

Thank you. That puts into words something I've been feeling for a long time now. Building a lean, fast, elegant website with complex business logic and interesting invariants: super fun code. Adding the Nth server side validation check for a zillion similar but subtly different fields: boring engineering.

Re: Why Must You Pay Sales People Commissions?

#57

Post by caf »

jetsnoc wrote: post #42
JamesBarney wrote: post #16

CEOs tell everyone if you want great CEOs you gotta pay them. If you wanna great salespeople you gotta pay them. You want great devs. You should put in a ping pong table and give out free soda. The myth that great developers aren't interested in compensation is terrible for our collective pay.

Nailed it. A commission structure is key when it comes to sales and a good one puts all of the right motivators in to all of the right places. It keeps them hungry, selling more, and they are motivated to structure deals and sell the product. Devs, the very best ones, don't want to punch a time clock either and they aren't a production line. We want to build good reliable products that are sold and ultimately used by…

I know it's hard to find really good sales people too that are interested in selling aggressively, meeting goals but also building sustainable and fruitful relationships with clients instead of building a house of cards.

I think it's down to the incentive structure. Commissions need to be split between sales and earned revenue from prior sales, and the split needs to be just right in order to incentivise building long-term profitable relationships with clients but without making it too easy to just coast on last year's results.

Re: Why Must You Pay Sales People Commissions?

#58

Post by mturmon »

Finnucane wrote: post #27
sidlls wrote: post #5

I like how he inadvertently admits that engineers are compensated less well in part because they mistake their jobs for something fun they'd do anyway.

Yeah, certainly there are a lot of programmers writing software because it's fun for them. They're contributing to FOSS projects because they believe in them. Are they doing what _you_ want them to do just for fun? Probably not.

I agree with your observation, that was a badly broken analogy within the OP. Of course the OP can "guarantee your sales people never sell enterprise software for fun."

But I'll bet those salespeople take more than a passing interest in buying a car, tending an estate sale, dividing up household responsibilities, or negotiating a lease.

Re: Why Must You Pay Sales People Commissions?

#59

Post by caf »

sidlls wrote: post #47
caf wrote: post #36

Earlier quoted context omitted.

Commission or Salary is orthogonal to Well Compensated and Badly Compensated. Those students selling paintball packages in the mall are paid on commission, but they sure aren't being paid well. (The article isn't "why sales people are paid a lot", it's about why their pay structure is based on a commission structure).

Sure, but in the context of this article engineer style compensation compares poorly. That is, it's essentially a statement that engineers aren't compensated as well as sales workers, and one of the reasons given as to why that's possible is because engineers "have fun" doing engineering work even outside their jobs.

I'm not sure that's really true, though. The really good sales people get compensated really well, but the bad ones do considerably worse than engineers. The flip side of a commission based compensation package is supposed to be that the "fixed" / "base" component is very low.

Re: Why Must You Pay Sales People Commissions?

#60

Post by skj »

ericfrenkiel wrote: post #52
iaabtpbtpnn wrote: post #45

Earlier quoted context omitted.

The parent didn't display any rigidity of thinking, they simply criticized your inaccurate characterization of engineering work... a point which your non sequitur reply does not address.

> By comparison... is the operative phrase. Your fallacy is conflating engineering work and an individual engineer's scope on said work. Projects can fail, engineering teams can face delays - all common things. But an individual engineer is very unlikely to lose his/her job over it, in contrast to a sales person missing on his/her quarterly number repeatedly.

The point under contention is whether or not the completion of the project is completely under the engineer's control.
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