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Why Must You Pay Sales People Commissions?

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Re: Why Must You Pay Sales People Commissions?

#301

Post by freyir »

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.

You're backtracking. You claimed an engineer's work is deterministic and fully under his or her control. That may be true for a very limited subset of jobs, where engineers are doing essentially trivial tasks, but more generally, that is false.

Are engineers less likely to be held accountable for missing goals due to external factors? That depends on the organization, but that's an entirely different claim.

Re: Why Must You Pay Sales People Commissions?

#302

Post by clort »

seem_2211 wrote: post #282
rayiner wrote: post #241

Earlier quoted context omitted.

How much value do they add?

This is one of the biggest problems with trying to evaluate individual teacher performance (and reward / punish based on this evaluation), is that you need to watch out for incentives. Rewarding teachers who have best highest test scores, for example, is a pretty good way of disincentivizing good teachers from helping less gifted children. Sales people work their comp plan, especially if they're good. They tend to kn…

> Rewarding teachers who have best highest test scores, for example, is a pretty good way of disincentivizing good teachers from helping less gifted children.

In the UK at least, they have changed the measurement to one of progress in a basket of subjects. Students are measured as they leave primary school, and the secondary school is rated on how much different their grades are to their predicted grades.

I don't know how they game that system here though, there will always be a way

Re: Why Must You Pay Sales People Commissions?

#303

Post by carlmr »

wil421 wrote: post #238
brianwawok wrote: post #233

Earlier quoted context omitted.

Is there a reverse incentive here? *IF we bloat AWS costs for 1 year, then at year end find a way to cut 50k.. bam, big bonus? Maybe if the adding to AWS cost team is a different team from the lowering cost team...

Something like this happens all the time in Corportate IT, I've been seeing it a a lot lately. It goes like this VP agrees to do these projects in 2018 at X amount. VP gets the highest possible cost for X. VP cuts projects and/or project budgets down to bare minimum. Now he can say he saved whatever amount and is a hero for saving so much let's give him a fat bonus.

Exactly, you can always fool the metrics, but everyone who is paid by metrics is doing it.

Re: Why Must You Pay Sales People Commissions?

#304

Post by rpwilcox »

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…

> 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

And anyone who can't will be, and should be, outsourced.

Know. Your. Value. To. The. Business.

Re: Why Must You Pay Sales People Commissions?

#305

Post by carlmr »

Raphmedia wrote: post #284
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. That's not true for everyone. I worked for an agency that did e-commerce integrations and developments and we had eyes on the client's budget and profits along with our agency's. We were not paid on commission either despite knowing the exact value of our work. To be honest, being so close to the money was demoralizing. I…

Yeah, in my last job I saw I was making the company over a million Euros a year, if you split the projects among the employees working on them. And I got an entry level salary.

It was demoralizing, I switched to a bigger company that pays well. And it's so soul sucking that I yearn for my last job. Money isn't everything. Life is still unfair.

Re: Why Must You Pay Sales People Commissions?

#306

Post by carlmr »

cafard wrote: post #218
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…

Well, yes and no. I have seen "sales" types get accounts handed to them, after which they are essentially collecting rent. If their protectors are sufficiently powerful, this can continue indefinitely.

Account managers would be the ones mending the existing clients. They get less commission but they can coast a little more easily.

Re: Why Must You Pay Sales People Commissions?

#307

Post by _uy6i »

daladd wrote: post #262
rbcgerard wrote: post #251

Earlier quoted context omitted.

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

I'm curious why you would divide by .75 there (?)

It was a proxy for the fact most teachers have summers off, so are only working 3/4ths the year...

Re: Why Must You Pay Sales People Commissions?

#308

Post by olavgg »

bspn wrote: post #291
olavgg wrote: post #137

Earlier quoted context omitted.

Not always. We sell out software to the big banks and we don't have a single salesperson in our team. Everyone call us. The reason for this is that we have been in national newspapers with awesome articles, which is great marketing. I'm sure we could do even better on the international market with a sales team.

Out of interest, who speaks to them when they call if you don't have a sales team?

We have 3-4 people that take care of that and that works with closing. But sales is not their primary role.

Re: Why Must You Pay Sales People Commissions?

#309

Post by anonyxyz »

ChemicalWarfare wrote: post #276
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…

What about sales engineers though? I've never seen them get commissions even though in a vast majority of cases they are the ones doing the heavy lifting of convincing the client's tech team[s] to go with the product/solution the company is selling? A little less obvious case, but still - what if we're talking professional services type situation and the architect/engineer assigned to the customer does such a killer…

If you haven't seen sales engineers get commissions, then you're working for the wrong companies. Very common for sales engineers to have up to a third of their comp commission based.

Re: Why Must You Pay Sales People Commissions?

#310

Post by taysic »

rbcgerard wrote: post #251
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…

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

Interesting, CA ranked 41st out of all states for its school system this year.

http://www.mercurynews.com/2017/01/05/california-schools-ear...

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