Paying Commissions...Where's the Lesson in THAT? |
December 2016 |
Handing out commission checks around the holiday season was one of the things I loved most when I was managing sales teams...especially when we had a good year. Most of the time this was a joyous thing - who doesn't like giving/receiving commission checks? Yet of course, not everyone hits it outa' the park, so of course there are tense and challenging conversations that arise every December between sales manager and sales executive (SE). (This posting is not about those usual situations...I trust most seasoned sales and management professionals are well versed in the ups-and-downs of quota setting, commissions, and the like.)
When I ask most of my constituents - sales managers of all levels - how much energy they commit to a "sit down chat" when they hand over the commission check, most admit they do not invest much time at all. This is a post about the learning that should accompany the process of handing out commission checks. Not all commission dollars are earned equally, which means the interchange between manager and SE ranks high as a teaching (and communication) opportunity for the manager. Communication about how the real world works - and accompanying expectation management - is at the core of the chat between manager and SE. The most important question that a manager can ask a sales executive throughout the ebb-n-flow of the average sales day/week/month is: "what did you learn?" And, that very same question is the key one to ask when the manager is handing over the final check of the year. How the SE answers tells a lot about how he/she thinks of his/her skills and talents, and how situations during the year were interpreted. Not all commission dollars are earned equally! Besides "what did you learn?", a year-end session between manager and SE may include the following:
1. Is there acknowledgement that lots of folks helped the SE make those sales and earn those commissions? (And is the SE offering gratitude to key team members?) 2. Were there any "gift sales" that floated in like pennies from heaven? Not every deal is sold...sometimes deals are bought regardless of the SE's effort. 3. Does the SE understand that stars just sometimes align - and not every sale is made because of the SE's "incredible greatness"? (Ego-checks are important to make sure the SE doesn't let success go straight to the head.) 4. MOST IMPORTANTLY: Does the SE understand how skill development focus and improvement during the year led to a "bigger" commission check? Yes, it's hard to correlate skill dev work and commission earnings, but there must be a chat about the accountability for work done to improve skills like presentation/communication abilities, obstacle handling, negotiation/closing, etc. This of course brings up the next most important part of this post: that there WAS a personal skill development plan in place during the year for the SE. There must be a chat about accountability for the work that was done to improve developmental skills during the year. Okay, it's the holidays and your time is precious....there's a party somewhere you gotta get yourself to, so let's summarize:
1. Sit down with each SE and talk about the year: how did it go? What worked? What didn't work? How was their work ethic? What SPECIFICALLY did the SE learn this past year? What does he/she want to work on in the next year? Ask good open-ended questions and you will be surprised how much you learn about your SE's thoughts and motivations...which is only a good thing as you head into the new year to do battle again. 2. What was the succes of the skill dev plan established for that SE? And if there wasn't a plan put in place for '16, then maybe you need to call me (917-207-5183) and I can help you understand how to design and implement a specific skill dev plan for each SE. Don't beat yourself up if a skill dev plan wasn't implemented or managed (you sit with the majorty of managers), yet being the pro you want to be means attending to this important management component...so let's get something in place for '17. The commission check discussion might be the best one of the year between you and your SE. Making your SE think about how skills correlate to performance and results is at the cornerstone of strong management, and that should be your ultimate goal! Happy New Year! |
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