Are Sales commissions the best way to improve your sales teams' performance?

24 February 2021

Finding our biggest motivators might be more straight forward than you think 

 

On a recent podcast with Roger Steare, corporate philosopher, the link between an ethics led approach and the financial performance and success of a company brought about a very interesting question: Are sales commissions the most effective way to get the most out of your sales team? 

It is quite the thought-provoking statement. Generalists would argue that yes, it indeed is. But consider this view on it: 

Most companies, if not all, use some kind of commission structure to incentivise salespeople to perform better and reach their targets. In relation to Maslow’s hierarchy of needs, this idea addresses the bottom half of the famous pyramid – the safety and physiological aspect of human needs. However, as we know, the further down the pyramid we go, the lower the levels of motivation are present.  

 

Maslow's Hierachy of Needs, Source: simplypsychology.org

Image: ‘Maslow’s Hierachy of Needs’, Saul McLeod (https://www.simplypsychology.org/maslow.html#gsc.tab=0) 

 

What happens when, for example, a commission structure gets capped, or thrown away altogether? This may also be prevalent in today’s Covid world, with companies needing to survive by cutting costs wherever possible to continue to stay afloat. 

Would salespeople still be motivated to perform to the highest standard? 

In the episode, Roger argued that commissions can be seen as forms of bribery; a poor substitute for people who have high levels of motivation because what they believe in doing is for the greater good. 

Sales commissions may have worked for current sales leaders in their respective roles and therefore it would be easy to think that the same approach will work for everyone else. However, this is simply not the case. 

As Roger says in the podcast, the similarities to this way of thinking is a bit like saying I’ve been smoking for 50 years. I haven’t died from lung cancer.” 

He suggests that the 3 greatest motivators for teams are as follows: 

 

Value to community; knowing that the work the salesperson is doing has real meaning but also contributes great value to their community. 

 

Potential; the potential for learning how to do that purposeful work better every day.  

 

Having fun and being creative; see the joyful side of the work they are doing and spread joy doing so 

 

These ideas may sound simple, but they are not breaking news. Research from Google has found that when they looked at their most successful teams, psychology safety was the principle driver of their most successful teams. 

What does this mean in the context of sales? 

Quite simply, it would be challenging to create a climate of psychological safety if the sales team are living with the anxiety of missing sales targets or motivated by a sales commission.  

 

Are sales commissions ethical or non-ethical? 

 

It is neither. 

However, in the context of motivating your salespeople to perform the best that they can, it just isn’t the best way to motivate humans. 

Having a sales commission could mean that it’s all about you. You, the salesperson.  

It is therefore not about your clients or your customers. If salespeople exist to provide value for their customers, then one could argue that salespeople should be focused on what it is they can best do for their customer. Displaying the mindsets that customers want to see in salespeople should be at the forefront of a salesperson’s approach. 

Authenticity and Client-centricity are the fundamental base-line values that customers say they want to see in the salespeople they interact with. Being one’s true self whilst putting the customer at the heart of what their sales activity will bring out the most in the relationship. 

But what else can sales leaders do to help motivate their sales teams further? The notion of coaching is one that few sales leaders ever adopt, and in our experience, it is because they do not know that it even exists. Coaching for Sales Transformation is a solution that should be explored by even the most senior sales leaders. 

What is your perception of sales commissions?

Do they truly motivate you to perform the best in your sales role?

Ask yourself: would you perform at the highest level if they were to be taken away altogether? 

Let us know what you think, we would love to hear from you. 

 

Alternatively, listen to the full episode here. 

 

 

Hero Image Photo by Mateus Campos Felipe on Unsplash

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