Sales Bonuses Are Supposed to Motivate, So Don’t Waste Them on Easy Targets

Most companies pay salespeople a combination of a salary, a commission, and a bonus for hitting a quota, putting a portion of their pay at risk. The belief is that at-risk pay motivates salespeople to work hard and direct effort towards sales activities that encourage achievement of sales goals.

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Your Quota and Your Real Goals

Your quota is the number that your company assigned to you. It’s your revenue goal or, in some cases, it might be a goal assigned to profit. Your number is what your company needs from you, and they have attached a certain commission or bonus to that goal. Your company wants you to max out your compensation, but your number has a certain income attached to it.

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How Do You Measure Sales Management?

In some ways, the sales force is the most measured function in any company. All salespeople have a number (a quota) assigned to them, and progress toward that number is tracked maniacally. However, anyone who has ever tried to measure the ability of a sales team knows that this number is insufficient to determine whether a seller is actually good or bad at their job. But if you really want a challenge, try to measure the performance of the salesperson’s boss—the frontline sales manager.

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Why Sales Commissions Don’t Work (in the Long Run)

Republished from INC, August 12, 2014
By Aaron Skonnard

Think about salespeople and you think of stereotypes: people who are motivated only by money; risk takers who thrive on the adrenaline of a potential massive payoff; territorial lone wolves who aren’t team players; nine-to-fivers who are inherently lazy and will only work hard if incentivized with a big carrot.

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