“We are trying to give hourly workers the same metrics as salaried workers,” GM Vice Chairman Stephen Girsky said Tuesday at the Detroit auto show. “There is a big pay-for-performance element going through the company and there is going to be more of it.”GM wants more flexible pay levels for workers as a way to encourage better performance and avoid locking the company into handing out big raises when the company isn’t performing well, company executives say.
If they change the system they will be able to measure their employees success immediately. I believe they will also build more productive employees.
Does this work ?
The Federal Government tries it on and deals with the conflicts, http://bit.ly/ns3JI3
You can use pay or other incentives to increase output, http://bit.ly/oAuwN5
Incentives can be customized for employees, http://bit.ly/nT1F1l
Linking employees pay to output does more than affect the bottom line of a business, it affects how an employee feels about his performance. Getting a pay check at the end of the week has more meaning when you actually see what you produce. Imagine how farmers feel when their seeds actually produce fruit?
Conceptually one and one make two but if you actually put two penny’s in a child’s hand, it brings it to reality. Many children are taught at a young age that if they take out the garbage they will receive an allowance, this is linking pay to performance. When I realized the value of money I was enthralled with taking out the garbage and kept asking if there was something else I could do to get paid. I couldn’t wait until I was 14 to start baby sitting. As I “earned from doing” I realized that producing had value and I was capable of producing. I bet that many of you had the same experience. It was all good!
Why don’t more retail stores adopt the policy of performance based pay? I often hear there will be more competition and the customer will suffer–why would a salesperson wait on a customer if they weren’t being paid? I would say it’s part of their job! It’s not easy devising a commission based sales structure but it has a big pay off for the store and the salesperson.
Having had both commissioned and non-commissioned jobs I vote for commission.
I am presently working for SodaStream as a brand ambassador. The product is super, I love doing the presentations and although I am asked to sell at least two machines, I’m not paid for performance. At first I worked very hard to sell the machines and then I realized it really didn’t matter. I decided I needed an incentive so I asked if I could put an affiliate link on my site for customers. If someone clicks on my link they receive a $10.00 coupon and I receive a few cents. Does it make a difference? It does to me; I know what I do makes a difference, to me and my company and it’s fun. I like being part of the success of a company.
I think salespeople pay more attention to their jobs and their company if they were paid for what they produce. I realize I’m really part of my company’s success.
Selling (and money) is about an exchange. An exchange of value for value. The mere act of selling is a service and can provide value to a potential customer even if the customer doesn’t buy. But, if the customer doesn’t buy, the company goes out of business.
If you want to stay in business my suggestion is you find a way to compensate your employees for actually getting the product in the hands of your customers. By compensating them for what they sell they can actually see that what they do makes a difference to their company.
I didn’t realize that The Home Depot gives quotas to sales people and Lowe’s Companies pay commission in some departments. These are stores that started out by not paying commission and later turned to commission.
More than anything commission builds self-esteem and gives people experience with taking risks. Success is built on risk; why not help your employees learn the principles of success while building your business?
Remember, most of us prefer to be first. There are more kids on Halloween who want to be dressed as Batman than Robin.
I love this quote from Tom J. Watson of IBM:
“Would you like me to give you a formula for success? It’s quite simple, really. Double your rate of failure. You are thinking of failure as the enemy of success. But it isn’t at all. You can be discouraged by failure or you can learn from it, So go ahead and make mistakes. Make all you can. Because remember that’s where you will find success.”
Lisbeth Calandrino is an award winning trainer, author, and blogger. She is author of the book, Red Hot Customer Service, 35 ways to heat up your business and ignite your sales. In her book Lisbeth outlines the steps for building a successful business with customer service techniques. Lisbeth has been providing custom marketing and sales programs for the past 20 years.