Structuring Pay for a Team LO15497

Gordon Housworth (
Thu, 23 Oct 1997 03:36:52 -0400

Replying to LO15483 --


At 00:15 22/10/1997 EDT, EBUDD said:

>I am utterly flabbergasted by this example. There are many areas of
>knowledge of which the sales manager appears to be ignorant. At the least
>he is lacking..

Well, perhaps you had to be there. Your outrage is palpable, and I
respect that, but I don't see the investigation that I feel should
accompany it. You give me far too much credit in presuming my having
control of the system. The entire system was flawed and as Deming liked
to say, "People will only do the best they can."

I would have liked you to ask the questions that would have produced these

The time was the 1970s and 80s, the industry was the go-go
technology/systems arena - all venture capital based. Annual growth rates
were expected to be 50+% per annum. This sales job was the hardest of all
sales work - "Big Ticket" systems sales where the sales cycle was 9 - 18
months and it took 6 - 9 months to see if you could produce. Venture
capital backed firms driving towards an IPO (Initial Public Offering)
rarely train and buy their talent "ready-made," and hand you your head in
your hands in 3 or 4 quarters of non/poor performance.

Perhaps you've been a systems peddlar in this time and place and so I'm
carrying coals to Newcastle, but that's not the feeling that I get.
Quality systems peddlers were a scarce commodity - Your industry, much
less your firm, was exploding in regional coverage and revenue production,
the pay at par quota was high (and so attracted many that should have been
in other lines of work). All this conspired with the lag in being able to
identify productivity to create a massive inhaling of recruits.

You had to be able to hold a half million sale together and be at as ease
in the boardroom to the shop floor. Few could do and the attrition was
high. I urge you to reserve "treacherous" for the all too frequent
inhaling of recruits as "bushbeaters" (that was the term used) to flush
and develop a prospect only to have a seasoned salesman step in and take
over the sale. The recruits in these cases certainly never made quota,
never came close to comp at par quota, never knew what they did "wrong,"
were never trained, and were burned out to quit or be fired. Nearly as
treacherous was the skewing of total comp such that the base pay was very
low with quota comp topping off the par comp - low/non-performers dangled
along on a financial choke chain until they sold or left.

>This is a case where it would have been useful for the sales manager to
>report to a manager just like him.

He wasn't nearly as forgiving as I. Fail to make your numbers and you

Like it or not, my sales management was seen as enlightened, we made our
numbers, grew a solid group of sales performers, trained where little
training existed, and set realistic quota to comp - a success in light of
the limitations. Had I control of the entire system, I'd have done
something else.

Best regards, Gordon Housworth
Intellectual Capital Group
Tel: 248-626-1310


Gordon Housworth <>

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