Solution To Delimma Of Pay Structure For Sales Guyzz

A sales guy is a person whose performance can easily be quantified and seen by the higher management. He is actually the bread getter for the company. He is the face of the company to the customers and company needs to have best people up for the job. Hiring and retaining a skilled sales guy is an imperative task. So how does he get paid? Well he gets paid according to his performance ofcourse. But the question is what if the market has slump and he is unable to get much of customers. Is he really at fault?? No, it's the market. So should he face the blow? Moreover if his income is made fixed assuming he wouldn't get much of customers if market is down then his motivation would die. Only self-motivated and extrmely loyal employee can perform well in such an environment. As higher management is un aware of the market status really and him being the only person having the exact picture of market can fool the management by saying evrytime that the market is down and so is the sale.

So here comes the perfect pay structure for him. Please refer to the image below.





This helps the company owners not to worry whether the sales guy is giving the true picture of the market or not.

The income structure is divided into two parts one is fixed income (Base Salary) and the other part is directly tied to the amount of sales made (Commision).

Now, As the diagram shows there are three structures available for him to choose depending on the possibility of sales in the market.If he feels that market offers low sales possibility, he will opt for option 'C' where base salary is high but the income tied to sales made is very slight. But if he sees a comparitively greater oppourtunity in the market, he will go for option 'B' because as he would cross sales S1 his income exceeds the one of option 'C'. Similarly, if the market has huge opportunity attached, option 'A' would be the best becase as the sales S2 is crossed this structure provides the maximum income.

So this structures provide minimum security together with a motivation & incentives based commission

So how does it work in your Company??
A) Fixed Income
B) Pure Commision Structured
C) Hybrid Structur (as described above)