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The changing face of salesman incentives

COMPENSATION for sales staff is undergoing profound changes as companies fight the war for market share and talent. Incentives or variable compensation for salespersons is not a new phenomenon.

The concept flows from human motivational psychology, which postulates that achievement of a certain desired end (rewards in this case) drives human behaviour and action. Over time, this concept has not only been challenged but also shaped differently in the context of salesmen incentives.

In simple terms, organisations want to achieve more sales and this formed the basic metric for linearly aligned sales incentives. It is also referred to as the "insurance agency model" where agents get commission based...

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