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Why Must You Pay Sales People Commissions?

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Re: Why Must You Pay Sales People Commissions?

#251

Post by rbcgerard »

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…

Not sure where the idea comes from that teachers are poorly compensated. Relative to some other professions yes, but hardly a low Paying job. Annual teacher salary in California is $73k/year [1] divided by .75 is $97k/year with generous pension an medical benefits that probably push that number up $25k-$75k/year...

[1]http://www.cde.ca.gov/fg/fr/sa/cefavgsalaries.asp

Re: Why Must You Pay Sales People Commissions?

#252

Post by mherrmann »

I recently read the author's book "The hard thing about hard things". I understand many people here will be familiar with it. To those who aren't, I recommend checking it out. It finally made me "get" VC and what it's like to work on VC-backed startups. (I'm bootstrapping my companies.)

Re: Why Must You Pay Sales People Commissions?

#253

Post by hacking_again »

rayiner wrote: post #249
hacking_again wrote: post #246

Earlier quoted context omitted.

All of it? None of it? Teachers themselves don't add value, teachers enable value addition.

I mean, obviously everyone adds value (from janitors up to doctors). And my person view is that all jobs should be compensated at the same hourly rate. But is there anything special about teachers? Like if they all quit society would go to hell, but that’s true of garbagemen and road workers too. The question is, does it matter who does the job?

Oh no, I meant teachers in general, i.e. the ones who teach. I guess broadly there's direct and indirect value adders, each group needs the other.

Re: Why Must You Pay Sales People Commissions?

#254

Post by boomboomsubban »

aj7 wrote: post #200
richdougherty wrote: post #136

Earlier quoted context omitted.

I'll just put one citation into this discussion. Raj Chetty and his collaborators produce amazing research. I attended a talk when he visited New Zealand a few years ago. In this paper he's attempting to address the dream of measuring teacher value, by measuring changes in test scores against changes in lifetime income. Yes there are other ways of measuring teacher "value" too, but income changes are relevant to this…

250k lifetime? So he should get another $6k. Teachers and engineers don't work for money. And there are often bad consequences for people who "don't work for money." I worked in sales so I could afford to be an engineer later. There were plenty of ex-teachers in sales. They did well.

Replacing one teacher in the bottom 5% with an average one got the student $250k more over their lifetime. So the average teacher is generating around $135,000 more than the poor teacher.

And equating teachers to engineers makes no sense, I've met dozens of people in some engineering school to make money.

Re: Why Must You Pay Sales People Commissions?

#255

Post by marcosdumay »

asdfgadsfgasfdg wrote: post #177
camelite wrote: post #148

Earlier quoted context omitted.

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. Wh…

If teaching is indeed universally bad (which I doubt but lets go with the idea as a thought experiment) - then surely the issue must lie with training/the accepted teaching methods?

It's not necessarily training and methods. Any environmental issue would create the same situation (curriculum selection, normative bias into testable results, etc), as would a self reinforcing cycle of undervaluing the professionals and competent people running away from the undervalued profession.

Re: Why Must You Pay Sales People Commissions?

#256

Post by frgtpsswrdlame »

rayiner wrote: post #249
hacking_again wrote: post #246

Earlier quoted context omitted.

All of it? None of it? Teachers themselves don't add value, teachers enable value addition.

I mean, obviously everyone adds value (from janitors up to doctors). And my person view is that all jobs should be compensated at the same hourly rate. But is there anything special about teachers? Like if they all quit society would go to hell, but that’s true of garbagemen and road workers too. The question is, does it matter who does the job?

>And my person view is that all jobs should be compensated at the same hourly rate.

What? Care to elaborate?

Re: Why Must You Pay Sales People Commissions?

#257

Post by blusterXY »

avs733 wrote: post #228
aj7 wrote: post #200

Earlier quoted context omitted.

250k lifetime? So he should get another $6k. Teachers and engineers don't work for money. And there are often bad consequences for people who "don't work for money." I worked in sales so I could afford to be an engineer later. There were plenty of ex-teachers in sales. They did well.

>Teachers and engineers don't work for money. And there are often bad consequences for people who "don't work for money." This is a metnarrative[0]. It is a thing that people say not because it is true but because it is useful to create a larger narrative that is perceived as useful within the social sphere. Peopl, especially engineers, are socialized to believe it and normed to say it. The result is very simply lowe…

Dressing up a bad argument in the rhetoric of a derelict academic philosophy does not make it interesting or correct. Especially when all you are doing is describing a concept rather than telling us why it applies in this case.

Besides, if there is a fallacy in the OP's statement surely it is not the assertion that teachers don't prioritize money so much as the assertion that engineers do. At least among the software engineers I know (and I suspect the same holds for most people on HN), engineers are as multifaceted in their approach to work as anyone else. Most people would happily trade off non-trivial amounts of wealth for other social values such as work-life balance or work on projects that have personal meaning. The most unhappy workers anywhere are those who can only choose between jobs based on their salary.

Re: Why Must You Pay Sales People Commissions?

#258

Post by jasode »

mavhc wrote: post #240
phkahler wrote: post #226

Earlier quoted context omitted.

>> Teachers and engineers don't work for money. You're right. I hit the comment button and was going to say you're damn wrong - I have done a lot to increase my pay with each new job. I wouldn't be at work if not for the money. But then I realized you're right too. I don't think about money much at all when I'm a work. I do try to make a good product, and I do worry about bill of materials and production cost, but I…

An engineer doesn't want to make a bad product, but if a company has a good product they don't even need to hire a salesperson

Both Boeing and Airbus make good airplanes. Nevertheless, they hire expensive salespeople and pay them massive commissions. They don't just tell the airlines to download a pdf brochure of the planes' specifications and call them when they're ready to place an order.

People making statements such as "good products sell themselves" are probably thinking about gadgets like iPhones that don't require "greasy used car salesmen" with high-pressure tactics to close a sale. Yes, the Apple employees at stores are more like order takers than salespeople.

However, many well-engineered products absolutely require salespeople to close the deal. I was recently researching $100k CNC milling machines -- there are several brands with quality engineering and yet they all have salespeople to guide prospective customers about configurations and persuade me to buy. Trying to decide purely based on information posted at the manufacturers website and printed brochures would be unwise. Yes, the general "concept of a CNC machine" sells itself but a particular brand & particular model of CNC does not.

Re: Why Must You Pay Sales People Commissions?

#260

Post by GuB-42 »

jasonkester wrote: post #185
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…

As an engineer, the way you get paid for the value you create is by starting a company. In fact, that's the way you do it in pretty much every profession. The only difference between the guy who owns a successful Veterinary practice and the guy working as an underpaid veterinarian is that one of them went out and leased some office space.

When you start a company, you are a business owner first and an engineer second. It is not the same job.

You may be the best engineer in the world, if you don't know how to find customers and get paid, make good investments, and do all the bookkeeping, or, alternatively, hire the right people to do it for you and manage them, then your business will fail.

However, if the only thing you know is how to do business, then all you need to do is hire a competent engineer and you will succeed.

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