Sins of Commission
October 15, 2009
kimlefever
This article was interesting in the way that it straight up took the side against commission-based job positions. I think it would have been better enhanced if it had detailed how a successful commissioned position company was run, and why their commission plan was so successful. With that said, I do agree with the article that adding commission-based incentive for employees can result in the reverse of what a company is trying to achieve with the program.
I think the commission-based incentive program is best implemented when trying to boost sales (say in terms of a car dealership) rather than trying to change behavior (in terms of the garbage company example). Furthermore, it is important for a company that implements a commission program to also pay their employees a base wage in order for the program to work properly and treat the commission as a reward to the sale rather than the reason for a sale. In doing so, it would eliminate the issue that the author discussed about his experience at the commissioned car dealership, because in this case, the dealer could show the car, gain loyalty, and then be rewarded when the car sells (even if it’s not that same day).
I personally think that implementing a commission incentive program in order to change behavior is pure laziness on the part of upper-management of that company. They do not wish to look at the underlying causes that are attributing to the behavior in order to change them, or in other words, they are only doing single-loop thinking.
Commission incentive programs only work for certain types of people. I once worked for a company that had a different type of incentive program that rewarded me based upon my sales, on top of my base wage. However, this program promoted poor ethics by the team because our sales numbers were posted which promoted unfriendly competition. This caused people to make false sales by signing people up for things that they didn’t agree to. I then realized that the job wasn’t for me, but it was a good learning experience for what doesn’t work for me and what I shouldn’t do if I am ever put in the position to make an incentive plan decision as management.
Entry Filed under: BADM 720
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