“Commission encourages an ‘I/me’ culture. Team-based pay encourages a ‘we/us/the team/the customer/the company’ culture,” says Neil Ducoff, founder and CEO of Strategies. While commission is safe and simple, he says, it leaves too many productivity decisions in the hands of the employee. Because it’s based on a percentage of sales, commission offers rewards even when performance and behavior issues persist.
Instead Ducoff is a proponent of a team-based pay structure. “Team-based pay is an hourly and/or salary program, which ties a team bonus to the achievement of critical numbers (e.g., revenue, gross margin, client retention, productivity, net profit),” he explains. “Individual growth is tied to overall performance — not just the employee’s ability to generate revenue. A team-based pay system is designed to reward the right behaviors and performance — those that support the business’s goals and culture.”
Want to learn more about team-based pay? You can download a free white paper on the topic at www.strategies.com.