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There's many reasons for this, one that's simpler to explain is relative performance. If sales person A is working a lot harder/smarter/adaptive to get more cl
by r_singh 8y ago
There's many reasons for this, one that's simpler to explain is relative performance.
If sales person A is working a lot harder/smarter/adaptive to get more clients that sales person B. It may lower his morale to see B get the same compensation as him. This affects sales people more than other functions because the output of a sales person is more or less quantified by the revenue they are responsible for generating (exact metric would be different of course).
- undreren 8y agoAs always, you get exactly what you are measuring. I've experienced sales people who oversold more or less everything. They weren't measured on whether or not what they sold could be delivered. Instead, product teams had to run around as if they were on fire, because suddenly the CEO got involved and made it a "company wide priority". I hate KPI's / commission structures, and I have never seen it working. Not where the work required more than half a brain cell. I guess my great hatred for KPI's is that they are often vanity metrics. What you want to measure is net contribution to the bottom line, and that is near well impossible. So we end up measuring what we can, and Goodheart's law [0] being what it is, get absolutely no value out of it [0] - https://en.wikipedia.org/wiki/Goodhart%27s_law https://en.wikipedia.org/wiki/Goodhart%27s_law Bonus info: I've had work, where I did not have KPI's, but where I could destroy the KPI's for other teams, and sometimes involuntarily did.
- deleted 8y ago[deleted]