by Elicia Flom

Created on: December 29, 2009

Sales, whether for a product or service, drive the business. Without sales, and consistent sales, there is no business. Whether selling frequently to a few customers or selling sporadically to many customers, businesses depend on consistent sales and prefer to have consistent growth in sales.

No Salary for Salespeople

Determining whether salespeople should be paid a salary, a commission or some combination is a very tricky balance to achieve whether a business is large or small or somewhere in between. Offering a salary may undermine the performance of the "true salesperson" by building in a safety net based on the notion that every person has value and should be compensated for time spent in the business.

While in the short term a salary may be helpful, particularly if there is a lengthy initial training process for the salesperson, the sooner the salesperson is paid for sales performance, the better. In other words, the sooner the salesperson recognizes that each sale made builds to the next sale, the better for the business, and in turn, the better the salesperson is supported for future sales. Salespeople compensated based on a "straight commission" are really part owners of the business. They may assume less of a risk, which factors into the rate of their commission, but when performance and ownership are woven together, "true salespeople" provide their own motivation.

Motivation and Deviation

Motivation is often used as the reason for offering salaries. There is a perception that if people are not "paid" routinely that they will feel "taken for granted" and less inclined to work consistently. There is also the notion that "commissioned" salespeople will use "hardball" tactics that may be unacceptable to the business in order to "make the sale" at all costs. For the purpose of this debate, I will leave the discussion of motivation to the psychology experts who may know better what truly motivates individuals and focus instead on the business perspective.

A Salesperson's Worth

People who have never been employers may find it difficult to understand that a person's “human” value or “worth” is different from his/her "business" value. If an employer hiring a salesperson chooses not to distinguish between human value and business value, or if the sales cycle for a product or service is quite lengthy, the employer may opt for a salary or salary plus commission compensation package to start. Eventually, for a business to succeed, salespeople

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