Dhiren Vyas
Sales,marketing And Soft Skill In Pharmaceutical
Recruitment/talent Acquisition, Career Counselling
Consultancy_hr & Ir
+1 Other

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Hi Everyone,
I am seeking help on whether it is beneficial for a company to have salesmen on payroll or just hire them on commission basis only?
I understand both have their pros and cons, our company is exploring the various advantages of having Salesmen on commission only basis.
Please help me with things that we may have to consider in the process, what kind of commissions should be set, that would motivate them to get us more closed deals.
We are into Network Operations Center, Offshore Development Center, Telecom consulting etc.
I am open to different views and opinions.
With Regards,

From India, Bangalore
How about employing Salesmen on rolls, create different salary structure, give them indirect and retiral benefits, grant them identity (of the organization) andyet put them Commission such that together they EARN handsomely?
This way they project accountability, credibility and help build sound customer relationships. Your customers will assured that do not have to deal with who may not be regularly attending them. Further a salesman on rolls is obliged to function all the time for your oeganization and that helps him offer focussed attention to the customers.
This is not out of box thinking. It is done nefore and I have had the experience of managing such a system. And I am sure many would have handled this system to advantage.
June 2, 2011

From India, Pune
Dear Nithya
This a common problem with sales function. Due to low Returns on investment, in other ward high expense ratio and commercial non viability of salesmen. Management is forced to think on a line expressed in your letter. This is O.K if you have M L M type of marketing where probably 20 percent brings 80 percent business
However if company wants to have a better corporate image and brand equity in the segment they must have a stable sales force and groom them regularly through training and motivating to achieve organisational objective.
In sales and marketing nothing is wrong and nothing is right. It is a matter of success. so keep open mind and options.
Dhiren Vyas

From India, Ahmadabad
Hello Nithya,
Like Samvedan mentioned, it HAS to be a combination model. Like you mentioned, every option has it's own set of Pros & Cons. So you need to figure out the BEST combination that works for your situation.
In a way, it MAY need some amount of experimenting too--with different combinations over a specific timeframe and in a limited geographic area & judging the results--and then refining & freezing the Final Model before expanding to cover the whole company's sales force.

From India, Hyderabad
Hello All,
Firstly Thank you to Samvedan,Diren Vyas, Tajsateesh, for your prompt replies and valuable guidance. I apologize for the late response, as I was unwell and off track for a few days.
Valuable point that can not be forgotten like : Accountability, Company image, uninterrupted attention, control on their activities, etc.
I will put forward these points in the forthcoming meetings, and suggest a combination of fixed and variable pay structure that will motivate and also keep the sales men on their foot.
I would like to seek out for help again ,is there a guideline or rule that needs to be followed by deriving an suitable combination of fixed and variable pay scale, what should be the break up like ?
Thank you once again.
With Regards,
Nithya Mehta

From India, Bangalore
Hello Nithya,
Suggest have a Brain-storming session where the key people in sales are there AND ask them to throw-up ideas. Before the start of the session, make your bottom-lines clear--like you mentioned [Accountability, Company image, uninterrupted attention..........].
This method would be better in 2 ways:
1] THEY will have a chance to lay the Policy--from the HR perspective, it's THEIR Rule now. So the tendency to put it into practice is much higher [basic human psychology].
2] Since they are the ones who face the flak or the kudos, they will be better placed to point-out areas where the ideas thrown-up are practical & those which aren't.
However, in such a modus operandi, pl remember that there will always be a tendency to downplay/avoid the tough parts--vis-a-vis their efforts. So someone senior in the session may need to put his/her foot down whenever things suggested 'could' be leading to sort of 'built-in loopholes'.

From India, Hyderabad
Hello TajSateesh, I appreciate your suggestion once again, I will try it out. With Regards, Nithya Mehta
From India, Bangalore
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