Some people called me a pioneer – others thought I was crazy – to suggest that traditional commission-based businesses could convert to a non-commission system. “They won’t be motivated. They’ll quit. What if sales drop? I can’t afford it.” These are the basic responses I’ve patiently listened to and responded to for years. I didn’t create the Team-Based Pay (TBP) system to create controversy; I created it as a business model capable of building dynamic world-class companies.
The challenge with commission is its simplicity. “You earn a piece of whatever you sell.” It’s an “I/me/mine” pay system. Creating extraordinary customer experiences requires systemized and coordinated team effort. It’s virtually impossible to get “team” without rewarding team effort. Commission is used as the prime motivator for performance, while countless studies have proven that money is not the prime motivator. If commission is a motivator, why do you have employees who you’re constantly pushing to perform and achieve “average”? The 80/20 rule is in play with commission, which means that 20% will be motivated to perform. The 80% require extensive leadership engagement, performance systems and accountability. Commission, even with sliding scales, lacks the horsepower to achieve the extraordinary. Continue reading ‘More than 30 years of carrying the Team-Based Pay torch’