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Why Must You Pay Sales People Commissions?

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Re: Why Must You Pay Sales People Commissions?

#141

Post by watwut »

tensor wrote: post #101

I suspect that developers are not so much upset at salespeople getting commission, but rather why they get paid so much compared to developers. Personally I don't buy that sales skills are so much more difficult to find or are in higher demand than software development skills. Some of the difference in equity certainly has to do with the higher risk of getting fired for poor performance in sales. But beyond that it's…

The other reason is sales being motivated to sell no matter what - meaning they have all motivation to lie or mislead customers just to sell and none for the opposite. That leads to engineers being blamed for product not having (oftentimes mutually excluding) features that were sold or not being done in ridiculously short time.

Which in long term oftentimes costs more money then the non-existing feature was sold for. And it leads to bad relationship with customers - and somehow it is engineers who deal with those problems s not sales.

Re: Why Must You Pay Sales People Commissions?

#143

Post by matwood »

tiggybear wrote: post #139
jbooth wrote: post #25

Earlier quoted context omitted.

At the end of the day, a salesperson not making quota is going to be fired. The best salesperson in the world could maybe buy themselves an extra year, at best. But eventually, if they're so great, where are the numbers? And their next job search isn't gonna look so great. They can't solve a problem on a whiteboard to make up for the fact that their prior business was a bad fit for the market, or whatever. A salesper…

Do bad engineers not get fired?

Define bad. What metric do you use? Sales people have a single objective metric - sales.

Re: Why Must You Pay Sales People Commissions?

#144

Post by MrQuincle »

Waterluvian wrote: post #88
Fordrus wrote: post #65

Earlier quoted context omitted.

When I was still in the humanities (German Literature Major), my program was making a MAJOR push for all graduates of the major to be able to articulate to others and interviewers the skillset they'd gained during their time at university, and I found it quite useful and helpful, even though I can't remember too much about the specifics. I even talked to one of my professors personally about the push, in which I ment…

I think I know what you're saying all too well, if I understand correctly. In my Master's program, my advisor had to keep asking me to stop saying, "we" any time I described efforts. I didn't even notice I was doing it, but very naturally I would say, "we applied X." "We then did Y" instead of "I", being the sole researcher. It's very hard for me to be so bold as to flatly say, "I designed and built this, and I feel…

https://en.m.wikipedia.org/wiki/F.D.C._Willard used another strategy.

Re: Why Must You Pay Sales People Commissions?

#145

Post by peteretep »

ugh123 wrote: post #87
phkahler wrote: post #3

Why do sales people get commissions and engineers don't? Because the sales person knows exactly how much money they bring in and can claim "if I didn't make the sale, that money would not be coming in" even though it's not always true it's a good story. An engineers actions are so far removed from revenue that they can't make a claim so directly. Also, if they did want to claim a portion of product revenue they could…

>An engineers actions are so far removed from revenue that they can't make a claim so directly. Really? I see it the other way around. How did the salesperson contribute to building the product? A well built technology solution can sell it self in many scenarios. If we didn't have sales people, we could still build a product and push it into the market. Of course all of this depends on the type of product, but still.…

    > How did the salesperson contribute
    > to building the product?
I've worked at several companies where we've sold things we hadn't yet built in order to finance building them, generally with the client's knowledge.

I note as well that Uber was selling rides quite a time before they had any kind of real engineering backend.

Re: Why Must You Pay Sales People Commissions?

#146

Post by hyperpallium »

richdougherty wrote: post #63
phkahler wrote: post #3

Why do sales people get commissions and engineers don't? Because the sales person knows exactly how much money they bring in and can claim "if I didn't make the sale, that money would not be coming in" even though it's not always true it's a good story. An engineers actions are so far removed from revenue that they can't make a claim so directly. Also, if they did want to claim a portion of product revenue they could…

> the sales person knows exactly how much money they bring in I agree this is the key factor. Any job where a person can argue a clear, direct, measurable link between their work and profit is a job that can be paid based on financial results. Other jobs where you see this: financial traders, consultants with direct client contact. To take the other extreme, look at teachers. They have the potential to generate huge…

Though there are private schools that pay more; private tutors can make a lot more, esp to the super-rich.

[For a broader definition of "teacher", there's professional development seminars, and people who tour the lecture circuit. Though you're talking specifically about teaching children.]

Then, consider doctors (esp specialists and surgeons): there is an immediate, direct, measurable link to profound benefits, and though they are well paid, they aren't paid by commission... is it just because it isn't money?

Lawyers, esp barristers, are closer to the money, and do get a kind of "commission" (though some jurisdictions prohibit it).

Re: Why Must You Pay Sales People Commissions?

#147

Post by vidarh »

Waterluvian wrote: post #7
phkahler wrote: post #3

Why do sales people get commissions and engineers don't? Because the sales person knows exactly how much money they bring in and can claim "if I didn't make the sale, that money would not be coming in" even though it's not always true it's a good story. An engineers actions are so far removed from revenue that they can't make a claim so directly. Also, if they did want to claim a portion of product revenue they could…

Also personality. Good salespeople are... Good salespeople. They apply their craft when negotiating compensation. What am I going to do, make a single page app about why I should be paid more? ...actually that's not a bad idea.

Most engineers would do vastly better simply by negotiating at all when receiving an offer. I hardly ever experience engineers trying to negotiate when I hire people, yet when I've taken permanent jobs myself I have always negotiated and it has always yielded a higher offer (never once have I experienced anyone pulling an offer or refusing to raise the offer; sometimes they've not raised it enough for me to take it, though).

Re: Why Must You Pay Sales People Commissions?

#148

Post by camelite »

chimeracoder wrote: post #111
richdougherty wrote: post #63

Earlier quoted context omitted.

> the sales person knows exactly how much money they bring in I agree this is the key factor. Any job where a person can argue a clear, direct, measurable link between their work and profit is a job that can be paid based on financial results. Other jobs where you see this: financial traders, consultants with direct client contact. To take the other extreme, look at teachers. They have the potential to generate huge…

> Unfortunately the effects of a single teacher are so noisy and indirect that it's basically impossible to measure their performance. The lack of firm data is why the debate about teacher compensation is so fraught. The problem is not that it's hard to measure. The people is that teachers actually have very little ability to make a marginal impact on their students though their performance, except at the very tail e…

That's a myth. The real problem is that the average teacher (relative performance) is so far away from being close to maximally performant (as proved in studies which rigourously control teacher behaviour) that the impact of variation about that mean is swamped by environmental factors. People conclude that since swapping teachers doesn't make an appreciable difference, teacher performance can't make a difference. When in reality the problem is that teaching is uniformly bad (compared to maximal possible performance, which is very difficult. this is why the answer is not to look for better teachers but to look for better, uniformly implementable, curriculums)

Re: Why Must You Pay Sales People Commissions?

#150

Post by Retra »

tucif wrote: post #44
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'…

I think the whole (non)deterministic thing is off. Engineers could also execute a perfect development strategy to deliver a product and it could fail through for circumstances beyond engineering team (budget is yanked, project is delayed, etc.) But I do agree sales is more risky as it is the "last-mile" of the business and they have a target to make, so it's their neck on the line and we live in a system where we rew…

The "risk vs reward" is not a natural tradeoff. It is an artifact of creating situations driven by elevated risk, which is not always a rational approach.
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