Can reps make more than their managers? Yes, it’s fairly common, says DiMisa, and, in most companies, there’s no limit as long as reps are selling the right products to the right customers. A recent survey by Sibson Consulting found the following:
- 19% said reps can make more than the CEO
- 48% said the reps can make more than the head of sales
- 82% of companies said sales reps can make more than their managers!
However, this factor is highly industry dependent, says DiMisa, who is Senior Vice President, Sales Force Effectiveness at Sibson Consulting, and author of best-selling business book The Fisherman’s Guide to Selling.
For example, DiMisa says, you don’t see this overlapping of rep and managers compensation in software or high tech because those execs are highly paid and whatever the rep sells they get a piece of it.
DiMisa’s tips came during a recent webinar sponsored by BLR and HR Hero.
Sign-On Bonuses
Are organizations using sign on bonuses to attract the best talent? According to Sibson research, says DiMisa, of the organizations that plan to hire new personnel, only 13% plan to use or are using sign-on bonuses this year.
The typical response is: “We don’t need them anymore. Top sales people need jobs too.” DiMisa says that companies who do regularly use sign-on bonuses state that:
- The bonus range is usually 5% to 20% of the salary
- 15% bonus was the most selected sign-on bonus percentage
- Average dollar amount is $10K – $15K for 7– 10 year sales rep
Note: Of the companies that are not using sign-on bonuses, 34% stated that they will use longer non-recoverable draws as a sign-on incentive.
Step … away … from the keyboard! More than 700 prewritten, legally reviewed job descriptions ready at the click of your mouse. Use as is—or easily modify, save, and print. Pay grades are already attached. Try BLR’s remarkable SmartJobs program at no cost. Click here to learn more.
Hierarchy of Performance Measures
DiMisa offers the following hierarchy for performance measurement, with financial results the highest measure and judgment the lowest.
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Financial Measures
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Strategic Measures
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Inputs and Activities
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Subjective or Judgment Measures
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DiMisa adds that performance measures should meet three criteria:
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Controllable |
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Measurable |
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Strategic |
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In addition, he says, typically the percentages of total compensation allocated to the different levels in the hierarchy are different. Revenue typically represents the greatest percentage of pay at risk, and weightings vary for other performance measures and metrics are typically as shown below.
| Performance Measure or Metric |
Typical Weighting Range |
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Revenue |
40% – 100% |
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Units |
40% – 100% |
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Margin/Profit |
10% – 100% |
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Strategic Products |
20% – 40% |
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MBO |
10% – 30% |
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Customer Satisfaction |
10% – 15% |
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Other |
10% – 45% |
Key Element? Job Descriptions
What’s the basis for all your compensation and incentive planning? Job descriptions. Current descriptions that clearly specify the current and future requirements of the position.
And what’s the status of your job descriptions? Ready to help with succession planning? ADA-compliant? Essential skills delineated?
Job Descriptions … Critical, Yet All too Easy to Back-Burner
Concerned your job descriptions might not be up to date and compliant? … Actually, with BLR’s new program, they are.
BLR has now released its collection of 500 job descriptions, formerly only available in the classic, but shelf-filling, Job Descriptions Encyclopedia, in a program called SmartJobs on CD. That’s cause for celebration—your job descriptions are a click away from being done.
And we’re talking about virtually all of them, covering every common position in any organization, from receptionist right up to president. They are all there in BLR’s SmartJobs.
Most disliked chore checked off! More than 700 prewritten, legally reviewed job descriptions are ready to go at the click of your mouse. Use as is—or easily modify, save, and print. Pay grades already attached. Try BLR’s remarkable SmartJobs program at no cost.
These are descriptions you can depend on. Our collection has been constantly refined and updated over time, with descriptions revised or added each time the law, technology, or the way business is done changes.
Revised for the ADA, Pay Grades Added
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According to our customers, this is an enormous timesaver, enabling them to make compensation decisions even as they define the position.
SmartJobs also includes an extensive tutorial on setting up a complete job descriptions program, as well as how to encourage participation from all parts of the organization. That includes top management, employees, and any union or other collective-bargaining entity.
Twice-Yearly Updates, No Additional Cost
Very important these days are the updates included in the program as a standard feature—essential at a time of constantly changing laws and yes, emerging technologies. And the cost of the program is extremely reasonable, averaging less than 66 cents per job description … already written, legally reviewed, and ready to adapt or use as-is.
You can evaluate BLR’s SmartJobs at no cost in your office for up to 30 days. Just click here and we’ll be delighted to send it to you.
When reps make more than their managers, can it cause dissension? Not just from the managers, who aren’t happy making less than their staff, but also from the reps, who don’t feel like they need to show their managers much respect.