Conventional remuneration models in sales are often one-sided, little adaptable and unjust power. They are set too goal-oriented and motivate enough. Keep up on the field with thought-provoking pieces from Michael Chabon. Goal – and profit-oriented, motivational and highly customizable, so modern variable compensation systems are today. You are leistungsgerecht, and include all sales staff. Conventional remuneration models, however, have many weaknesses that all cost money in the end.
Following the shortcomings of traditional models are presented and then first the typical characteristics of modern compensation approaches named and represented. Over 90% of all field staff and over 60% of all internal service employees will be rewarded today already floating, i.e. depending on performance. Often however are still very traditional remuneration systems in use, which are oriented to the Commission. Reimbursed a certain percentage of turnover or on a yield size is usually.
Why are these remuneration approaches no longer good? These Remuneration models on one side to concentrate on a performance criterion (E.g., sales or income/gross profit) and not to neglect essential additional aspects of how power worth contribution margin, product goals, customer targets, etc., as more variable on the baseline performance of the employee’s income is allocated than on its target. Conventional compensation systems reward usually only a few employees in the sales and make island solutions in a way”that instead to integrate all employees into a performance-related remuneration. Conventional compensation systems reward often performance unjust, because factors like field potential and large customers have significantly more influence on the remuneration of the employee as its real performance. Classic remuneration systems are usually slightly flexible, because they can always pay the same performance criteria and too little on changes in the market or in the company. Classic remuneration systems are often too low or too high, variable income shares: to low variable income shares are not motivating and change the behavior of the employees towards performance. High variable income shares upset labour code and can lead to damage claims of the employee to the company.