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It's not a circular argument to point out that excellent sales people will take the commission job, while bad sales people will take the salaried job. All the t

by tlb 9y ago

It's not a circular argument to point out that excellent sales people will take the commission job, while bad sales people will take the salaried job. All the things you mention (support, morale, ...) are second-order considerations -- the first order consideration is getting the best people.

calinet6 9y ago
This assumes a specific philosophy of how companies work (good individuals) while an alternative model of good working systems is also effective. A systems view is less dependent on good individuals. As W. Edwards Deming said, "A bad system beats a good person every time."
- tptacek 9y ago
  I've read articles from credible people talking about building commission-less sales cultures and I like the idea. But from experience in a few different companies, one of which involved me directly working with a decent-sized sales team, adverse selection is empirically a major issue. Among the things I feel like I've learned is that the sales people who are most engaged with the product space and can converse most intelligently about the product you're building are not necessarily the people who are best at actually driving revenue, and that a fledgling product for which the numbers don't exist to guarantee a pretty steady stream of commissions will drag very intelligent-sounding ineffective salespeople out of the woodwork. There seems to be a species of salesperson that has evolved to sell executive management on continuing to pay them while blaming the rest of the company for their inability to close deals, rather than selling prospective customers on a product. I've had the misfortune of working with some of them. At the time, they even had me on their side! It's really quite creepy in retrospect. I'd go way out of my way to avoid attracting the sort of salesperson who is driven by anything other than transactionally closing deals as quickly as possible, just to avoid the possibility of having to work with someone like that again.
  - calinet6 9y ago
    That's a much less lazy argument. Horowitz should take notes.
chowells 9y ago
You've illustrated the circle nicely. Salespeople are paid on commission because salespeople are paid on commission. What if there was no commission job available as an alternative?
- late2part 9y ago
  What if God spelled backwards was Foot? Your hypothetical is irrelevant in the real world, as there are commission jobs available as an alternative. Commmunism would be wonderful if it weren't for basic human psychology.

by tlb 9y ago

calinet6 9y ago

This assumes a specific philosophy of how companies work (good individuals) while an alternative model of good working systems is also effective. A systems view is less dependent on good individuals. As W. Edwards Deming said, "A bad system beats a good person every time."

tptacek 9y ago
I've read articles from credible people talking about building commission-less sales cultures and I like the idea. But from experience in a few different companies, one of which involved me directly working with a decent-sized sales team, adverse selection is empirically a major issue. Among the things I feel like I've learned is that the sales people who are most engaged with the product space and can converse most intelligently about the product you're building are not necessarily the people who are best at actually driving revenue, and that a fledgling product for which the numbers don't exist to guarantee a pretty steady stream of commissions will drag very intelligent-sounding ineffective salespeople out of the woodwork. There seems to be a species of salesperson that has evolved to sell executive management on continuing to pay them while blaming the rest of the company for their inability to close deals, rather than selling prospective customers on a product. I've had the misfortune of working with some of them. At the time, they even had me on their side! It's really quite creepy in retrospect. I'd go way out of my way to avoid attracting the sort of salesperson who is driven by anything other than transactionally closing deals as quickly as possible, just to avoid the possibility of having to work with someone like that again.
- calinet6 9y ago
  That's a much less lazy argument. Horowitz should take notes.

chowells 9y ago

You've illustrated the circle nicely. Salespeople are paid on commission because salespeople are paid on commission. What if there was no commission job available as an alternative?

late2part 9y ago
What if God spelled backwards was Foot? Your hypothetical is irrelevant in the real world, as there are commission jobs available as an alternative. Commmunism would be wonderful if it weren't for basic human psychology.