Have you seen this video from Dan Pink on the relationship between incentives and behaviors?
Here’s a couple of interesting observations that relate to sales comp:
- According to Pink, studies show that for non-mechanical tasks that are complex and require conceptual and creative thinking, a basic amount of compensation must be paid or the person will not be motivated. You need to pay people enough so that they are not thinking about money and are instead are thinking about the work
- Money is often not a motivating factor, however, the three factors that do influence motivation are autonomy (self direction), mastery (urge to get better at their work), and purpose (making a difference)
On the one hand, I tend to disagree with painting all humans with one brush and saying that beyond a certain basic point, people are implicitly not money motivated when many factors such as individual upbringing, personality, profession, and stage in life might heavily influence money motivation.
People attracted to sales are wired differently than people attracted to other professions so this alone might support the argument that there are segments of the population that are more or less money motivated. If sales people weren’t money motivated, we wouldn’t see so many people gravitate to larger compensation and commission packages. Then there is the details of how the study was conducted, and how the questions are presented. Without knowing these details it is somewhat problematic to debate the results.
On the other hand, I am beginning to see more and more studies that imply people are less money motivated. There are certainly increasingly more candidates that we speak to that express a desire to work in a certain environment and the right for the right employer. So perhaps there is a trend away from pure money as a driver.
Either way, heed this advice next time you consider a 100% commission comp plan. A very aggressive commission rate is not likely going to help you hit your sales targets. Hat tip to Phil Culhane for the link to this video.
Eliot received his B. Comm. from Carleton University and has been honored as a Top 40 Under 40 Award winner.
He co-authored Sales Recruiting 2.0, How to Find Top Performing Sales People, Fast and provides regular insights on sales team management and hiring on the Peak Sales Recruiting Blog.
Latest posts by Eliot Burdett (see all)
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