It’s a touchy subject with sales people. It may be unfair but I think you can divide most people into two camps :
- Those who are content with salary and get nervous about needing to earn a commission.
- Those who see potential and are excited about earning a commission.
In my experience when given identical plans the sales people who fall into the later group consistently outperform the former group. That tells you how to select the people you need to build a high performing sales team.
When you get down to designing the actual plan, the potential to earn more with a commission has to be real and achievable. The worst case is when a salesperson is motivated by a commission plan and puts forth the effort only to discover that the reward is out of reach. The other bad situation is when the commission is too easy to reach. In that case it is equivalent to a salary. If it’s something that any salaried salesperson could achieve, it saps motivation.
Money isn’t the sole motivating factor for a high performing sales person. Respect from co-workers, belief in the mission, and support from management are all factors. Sending a new salesperson out on 100% commission plan may signal that the organization has nothing to lose if they fail and is just churning candidates.
The best plans I’ve seen involve a combination of base plus commission. Create a plan that is designed so that a basic salary can be achieved with a reasonably strong effort, while an outstanding effort is rewarded with outstanding compensation. I’ve seen this work especially well when there are product segments that are more profitable and an extra commission can be afforded. A high performing salesperson will run with that.
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