The more companies we work with, the more we see communication breakdowns being the root of most problems.  Our work with our clients spans more than just recruiting.  We assist them in onramping their new salesperson.  This function places us in the unique position of working with both the salesperson and the sales manager.

One of the more dysfunctional situations we encounter is a communication breakdown between the manager and salesperson.  One manager complained that the salesperson wasn’t doing what he asked, but he never confronted the salesperson.  Another time we had a salesperson who would not submit his weekly call report.  Ever.  Yes, he was let go (even we so-called experts miss on occasion).

Those experiences led me to this Selling Power article about compensation – a recurring theme on The Hire Sense this week.  The opening statistics are shocking (my emphasis):

According to a recent WorldatWork survey of compensation practitioners and HR managers, 76 percent of organizations report revising their sales plans every year as a matter of course. However, the same survey found that only 58 percent of organizations communicate these changes directly to the frontline sales manager.

Makes me wonder with whom do they communicate the change?  The article continues with an excellent point:

Since frontline sales managers are the people doing the hiring, their ability to understand the incentive plan is really critical to making the right hire and putting together the right recruiting message, says Stoeckmann. If they fully understand the compensation and incentive program and are kept up-to-date, they can be very effective recruiters.

As a recruiter, it is difficult for us to have a full understanding of the compensation (especially commission) plan.  One thing sales candidates always want to know is how “real” is the plan?  How many people make quota?  I can’t imagine a situation where a sales manager didn’t know those details.  That would be a tremendous red flag for a candidate.

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We have really come to enjoy Dave Stein’s posts.  They are timely and cut straight to the heart of the issue.  Today’s post is no exception.  Working strictly on the sales side of organizations, one of the areas we look at while profiling their sale is compensation.  Most importantly, we look to see if the compensation structure rewards the behaviors the company expects of the salesperson.  More times than not it won’t and from one of Dave’s comments, he sees the same issues:   

I am bringing this up because compensation is another dysfunctional area within many companies.  During the past quarter, I’ve been engaged with several clients where “errors of commission” are preventing them from achieving their team and corporate goals.

We ran into a situation a few years back where a company President wanted to upgrade his sales team and bring in an experienced national salesperson who could help him grow his company.  He was okay about having to pay more for sales experience, but his commission plan wasn’t aligned.  The commission schedule for a sales person to break the 6 figure mark meant he or she would have to more than double the total revenue of the company.  If they accomplished that feat, they should be running the company.

Through all this compensation discussion, Dave makes an extremely important point:

One important point: Having the right people in sales jobs comes first.  The best comp plan in the world doesn’t mean much when the salespeople it is intended to motivate don’t have the requisite skills and traits to succeed.

I couldn’t agree more.  If you don’t know where to begin, let us help you get started.

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In case you missed it, the IRS is raising the mileage reimbursement rate from the current 50.5 cents to 58.5 cents starting July 1, 2008.

“Rising gas prices are having a major impact on individual Americans,” said IRS Commissioner Doug Shulman. “Given the increase in prices, the IRS is adjusting the standard mileage rates to better reflect the real cost of operating an automobile.”

Keep this new rate in mind if you have any candidate offers going out soon.  You will want to adjust the mileage reimbursement as this is a very hot topic among outside sales candidates today…along with telecommuting.

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This article from abcnews.com discusses different corporate plans to help employees deal with the rapidly increasing gas price.  Of all the creative approaches I have read of late, I think this one takes the cake (my bold):

The career search Web site Jobing.com’s program really helps employees’ wallets. Those who meet certain requirements (such as length of time at the company, a good driving record and completion of a safe driving course) can get their car completely wrapped with the company’s logo. The reward: 100% of the employee’s gas is paid for along with a monthly $500 stipend. The company has an approved list of cars that employees can choose to either lease or buy.

Peter Difilippantonio was one of the first employees to get a wrapped car at Jobing.com. He purchased his Jeep Cherokee in October 2003 and paid it off last year using the $500 monthly stipend. Since the benefit doesn’t end when the car is paid off, he uses that money on household expenses.

I’m sure you caught that last sentence.  Now that is a clever perk.

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Selling Power released an archived article titled Four Elements of Excellence.  The short article provides a well-thought description so let’s cut right to the chase.  Here are the four:

1.) Goal Setting
2.) Commitment
3.) Feedback
4.) Organizational Support

I would say that is a good list.  The one that jumps out is goal setting.  This is something we see in the sales arena often, but not in a good way.  Many sales managers believe an annual quota is all the goal setting a salesperson needs.

But let’s jump back to the article:

Without specific goals, you’ll never know whether you’ve achieved excellence because you’ve never defined it. Hence, the first step is to write clear, specific goals of what you wish to achieve and at what level you wish to achieve these goals.

Here’s the issue – I worked with a fairly strong salesperson who had a golden territory.  He had worked hard to develop it and was successful in landing a handful of large accounts.  However, he stagnated.  The only measurement for success was the annual quota which increased slightly each year.

This salesperson was able to ride his good accounts each year to cover the increased quota responsibility.  Yet, his territory contained much higher potential.  The goal setting in this instance did not define the right growth for him or the bountiful territory he controlled.

Successful sales is a matter of executing the right behaviors consistently.  Goal setting should include prospecting, new customers, retention, product/service mix, industry associations, on-time expense reports, trade shows and many more items.  Define success beyond just profitable revenue.  Set appropriate goals that stretch the salesperson outside of their comfort zone.

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We are sales recruiters so we have been fairly immune to this question, but it is even appearing in our world.  For salespeople, the question is some variation of “How often will I be expected to be in the office?”  This question doesn’t mean they are planning on playing hooky; the candidate simply wants to start the discussion about working from home, their car, coffee shops, etc.

The Career News newsletter (sorry, no link) offers up a quick article on this topic:

When it comes to making a living, how many miles would you travel? According to many hiring agencies and recruiters, people job hunting are taking climbing gas prices into consideration. “If we were looking at them commuting 20, 30, 40 miles for a work assignment, they’re hesitating,” Blaise Krautkramer at Firstaff Staffing Services said.

Each week, about 50 people walk into our agency office, all of them expressing serious concerns about these high gas prices. A fair amount of these people are passing up job opportunities. “The cost of gasoline is a component in their decision, and it’s a difficult decision for them,” Krautkramer said. A short commute is now a top priority for job seekers.

If you haven’t done any hiring recently, be prepared for this topic.

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I read this line in a sales employment ad this past weekend:

Actual Year 1 average earnings  – $100,000  – $200,000 ++ REALISTIC

A $100K spread?  You know, this type of line is an immediate red flag for a jobseeker.  It may be true, but most salespeople will be skeptical.  They will put a multiplier of <1.0 on the number.

The sad part of this ad is that it was posted by a sales recruiting company.  The best bet in these ads is to be somewhat conservative on the compensation and keep a tight range on the potential.

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Anesthesiologists.  From Forbes.com’s America’s Best- And Worst-Paying Jobs:

…the mean annual salary for America’s 31,030 anesthesiologists is $192,780, up 4.6% from a year earlier.

Not surprisingly, the top 9 jobs are all in the medical field (surgeon, orthodontists, etc.).

Oh yes, and the bottom end of the scale:

The lowest paid of all? People who cook, prepare and serve in fast-food joints, followed by dishwashers, busboys and the folks who shampoo your hair.

I am proud to say that I was a dishwasher in high school.  Technically, we called it a “dishlicker” and we were at the lowest end of the totem pole.  That is the type of job that should be on Dirty Jobs.  I can’t describe the funk that permeated my clothes.  Despite my mom’s extreme laundry efforts, she could not remove the odor.

Nasty.

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We’re in the middle of a couple negotiations between our customers and their top sales candidate selection.  The companies are smaller and these positions are fairly important within the department so they are not “slotted” pay ranges that are more common in larger companies.  Both negotiations have similar topics (salary and commission plans are always prevalent in sales negotiations) but different approaches by the candidates.

Call it serendipity, but I came across a timely SalesHQ article titled How To Structure A Negotiation.  The author, Jonathan Farrington, provides 3 important steps for any negotiation whether it be for a potential hire or a potential customer:

The recommended structure for negotiations is:

1. Establish the issues being negotiated

2. Gather information

3. Build a solution

Here are a couple of excellent points from the article (my editing):

Stage 1. Establish The Issues

Many negotiators make the mistake of negotiating too quickly whereas skilled negotiators spend 20% more of their time asking questions and looking for alternatives.

Seasoned negotiators will often bring up an issue at the end of the negotiation, when you are vulnerable and likely to agree to a one sided (Lose-Win) concession, in order to conclude the deal. You can legislate for this ploy by asking the other side for their . “shopping list” before beginning the negotiation and refuse to accept any last minute additions to the list.

Stage 2. Gather Information

You need to decide, before the negotiation, how much you are willing to share information and what your own information requirements are. This will set the climate for the negotiation and will determine the amount of trust that exists between both parties. Skilled negotiators are able to ask a range of open, closed and follow up questions and are able to listen effectively. They also wait until they have all their information requirements, before making concessions.

Stage 3. Build A Solution

Typically, there will then be a process of bargaining, concessions will be traded and movement take place, until, hopefully, agreement is reached. Concessions should not be given away for free and you should be wary about conceding on issues for which you are not prepared.

One of our sales candidates added a new issue after receiving the offer.  This is a good move on his part, but it comes with some risk.  The negotiation will proceed at a measured level while we will see how he responds to the counter.  I am not as measured in these instances – I prefer to call the bluff which has left me in a pickle more times than not.  That is why I find Mr. Farrington’s suggestions valuable.

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This I did not know – from a Pioneer Press short Q&A article (my editing):

My company has a new district manager. He and I got off to a bad start when he divulged my salary in a mass e-mail and caused an uproar among my new co-workers. Some of them do the same job as me but make considerably less. When I called him on this, he responded, “What’s the big deal? They all tell each other anyway.”

A: Even though the manager showed poor judgment, he didn’t break the law, according to Richard Kass, a partner at Bond, Schoeneck & King in Manhattan. “Employees have no right to privacy in their salaries,” Kass said. The manager may have “acted stupidly,” he said, but he did not break any laws.

To take it one step further:

Your situation is unusual and is the inverse of a situation that actually is illegal. Companies typically get into trouble for directing employees to keep their salaries secret and then trying to punish those who exchange salary information, Kass said.

I’m a bit surprised by that fact.  It may be legal, but the manager sharing that information sure seems like a morale-killer.  He may have unwittingly opened a Pandora’s box.

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