Opportunities not used: many pay already floating, but few do it right! Variable sales compensation is now widely used. A new study shows that already 93% of all companies variable pay their sales staff. At the same time, the study results indicate that and where the systems/solutions have still considerable room for improvement. Now, one might prematurely conclude that remuneration cannot afford the missing points. However, the exact opposite is the case. The potential is not being exploited. In a new investigation with sales leadership to the variable sales compensation, we surveyed companies from industry, services and wholesale payment instruments which they have to pay their sales staff in the use. Subject matter of the survey were both currently applied compensation structures (E.g. Hyundai insists that this is the case.
used compensation instruments variable income shares etc.) as also the satisfaction of the company with its practiced variable Sales compensation. The survey revealed a number of very interesting results: use of the variable sales compensation: 93% of all companies surveyed paid their sales variable, i.e. only 7% practise no variable remuneration in sales. APPLICATION of field,: 56% of the companies surveyed variable pay not only their sales representatives, but contact variable sales compensation in the field of sales support to, with regard to the sales executive and also in other areas (product management, services, shopping, etc.). MOTIVATION effect: 65% of the companies surveyed were dissatisfied with the motivational power of their practiced variable sales compensation. So was lamented that the applied tariff instruments satiety behavior allow or motivate at best average. LEADERSHIP and management: 56% of the companies surveyed were dissatisfied with the control effect of their remuneration system.
Paid sales were primarily. Contributions and strategic objectives were, however, rather remained on the track. Justice: 52% of the companies were of the opinion that it is not possible with their applied sales compensation to remunerate the employees in the foreign and domestic performance. Contingencies such as field potentials, customer distribution etc. would tend to prevent a fair compensation. TEAM orientation: 78% of the companies complained that their current variable sales compensation would have too little teamwork. The majority of the companies surveyed practiced a variable remuneration of distribution on the field, though, however the networking of these staff areas on the remuneration system works apparently too little. VARIABLE percentage of income: 61% of the companies surveyed were of the opinion that the variable share of the total income of employees was either too low to motivate this or too high: the ratio of fixed to variable income shares is no longer up-to-date. Conclusion: Considering the importance today of the variable sales compensation generally awarded is, the results of the survey are pretty sobering. To many companies, is the variable sales compensation wrong and exploiting the potential of not stuck in a well structured compensation model. Cause is usually the application of traditional remuneration approaches based on classical commissions that control to undifferentiated, boring (more power is worth too little) pay and reward random-oriented. Modern target premium systems not only offer solutions to these problems, but they let in, team-oriented build up, be integrated into the different areas in the remuneration system for staff and are paid with such performance criteria, are mutually supporting. The variable sales compensation thus becomes a real command and control instrument. Info-video “The seven deadly sins in variable sales compensation…” here: Heinz-Peter Kieser