For those of you who manage an indoor sales environment (such as telemarketing), you may have been faced with the problem of the behavior of your employees. Salespeople are generally divided into two groups: those with Excellent Performance and Poor Behavior and those with Excellent Behavior and Poor Performance. In order to reward those who embrace both discipline and talents, and to penalize those who lack one or the other, I have devised a formula that factors Behavior directly into Sales Commission.
Keep in mind that this is based on an indoor office environment, in which the employees are expected to: show up on time, make 50 cold calls a day, make 5 pitches per day, and work 5 days a week totaling 40 hours. Essentially, a perfect score in behavior will DOUBLE their sales commission.
Here are some example scenarios that I generated, based on imaginary salespeople:
Bob makes 50 cold calls a day, shows up on time, is there every day, works a total of 40 hours, and makes 5 pitches a day. This week, he sold $3895 to previous customers and sold $895 to new accounts. His paycheck will be $1226.50, which is about 25% of his total sales performance.
Joe’s sales performance is the same as Bobs, except he showed up late 4 times, skipped work on Friday, only made 50 cold calls and 5 pitches, took long lunches and left early several times (totaling only 37 hours on his time sheet), he would have only made $570, penalizing him a total of $656 for poor behavior.
Bob made an extra $656 that week just for following all the rules! Joe needs to learn some discipline!
Steve is a hotshot salesman. His behavior is as poor as Joe’s, except he sells $10,000 to previous customers and $2000 in new business. Great sales numbers! But his paycheck is only $1395, just BARELY more than Bob’s (who follows the rules and only makes mediocre sales). Had he behaved as well as Bob, he would have taken home $3000, a full 25% of his sales performance.
Steve missed out on $1605 — what a loser!
Is it worth it to have an office full of employees with great behavior? Would this great behavior lead to increased sales? Some believe that it would!
I am offering an Excel spreadsheet of this equation for anyone that would like to try it out and apply it within their sales organization:
Simply adjust the fields that are shaded blue to see the results on the salesperson’s paycheck, which is shaded in green! Hours of fun!
Let me know how it works — I always appreciate feedback!