I. The particularity of sales personnel
Whether an enterprise can capture the market depends on whether there is a group of capable sales personnel effectively developing the market. Therefore, incentive compensation for the sales force is very important. Its particularity is embodied in the following four points:
(a) Flexible working hours and more independent actions. We can observe that sales work does not have a fixed timetable, with flexible working hours. Sales personnel have a greater degree of freedom in time arrangement compared to other jobs, usually independently facing clients while conducting their work.
(c) Enterprises emphasize material incentives for sales personnel but neglect non-material factors. Milorovich pointed out that compensation includes not only material aspects but also other non-material rewards related to the job. However, from the various calculation methods currently used in sales personnel compensation, it can be seen that the main incentive for sales personnel is still basic material incentives, making it difficult to meet employees' higher-level needs.
(a) The compensation system should be standardized, transparent, flexible, and internally fair. In this regard, we can refer to the practices of "Amway." The great success of Amway owes largely to its scientific and reasonable compensation system.
The company's compensation system directly affects the satisfaction and motivation of internal employees. Welch pointed out that the profits of an enterprise primarily and ultimately reflect the capabilities of the sales system. For such a group of employees who are crucial to the survival of the enterprise, compensation management becomes particularly important. This article first analyzes the particularity of sales personnel and the existing problems in their compensation management process, then proposes corresponding solutions.
(d) Overemphasis on individual incentives for sales personnel while neglecting overall team incentives. Currently, many enterprises adopt a team-based approach to sales, but in name only. In terms of compensation system design, they still focus on emphasizing individual incentives for sales personnel, promoting and encouraging individual heroism while neglecting group incentives.
(d) Higher job mobility. Most sales positions, compared to finance or design roles, lack technical content, have low entry barriers, high market demand, and make it easier for sales personnel to switch jobs than others.
(b) Work performance can be demonstrated through specific results. Compared to other technical managers within the enterprise, the performance of sales personnel can be directly displayed through sales volume or sales revenue.
(a) Lack of standardization, transparency, flexibility, and internal fairness in the sales personnel compensation system. Enterprises do not have clear, standardized compensation systems or widely known salary management regulations. So-called compensation standards are merely customary norms, and often unclear.
(b) Lack of timeliness in incentives. The operating environment of an enterprise changes rapidly, and the work situation of sales employees is uncertain. Their sales performance is influenced not only by their own efforts but also by other factors. If the enterprise adopts a rigid compensation system, it will inevitably dampen employee enthusiasm. Additionally, many companies' incentives lag behind and cannot provide timely feedback on employee performance.
Amway uses a multi-level direct sales method and has established a comprehensive and reasonable compensation system for sales personnel, especially its sales bonus system design, which is regarded as a classic example. In this system, we can see that it is a layered structure that is both incentivizing and does not lead to complacency. In the guidance manual, reward criteria are clearly defined, linking corresponding bonus amounts to different sales volumes, treating all sales personnel equally. Because the reward criteria are set beforehand, employees can align their efforts with these goals, feeling motivated and having something to strive for. Due to the clarity and fairness of the standards,
III. Response Measures
(c) Instability in work performance. The performance of sales personnel is affected not only by individual effort levels but also by product characteristics, seasonality of products, and product life cycles.
II. Problems Existing in Sales Personnel Compensation Management
This article originates from: As for individual entrepreneurs