All tagged Variable Pay

Many sales leaders and CFOs believe paying company sales representatives as if they were agents (100 percent variable pay) strengthens alignment between a company’s objectives and sales representatives’ focus and results; however, the absence of a base salary often has an adverse effect with significant unintended consequences: Lack of Control, Complacency, and Limited Flexibility.

One approach some Transportation & Logistics companies took for dealing with the recession was to eliminate incentives or cash compensation and revert to a 100% salary approach, which gave them the ability to manage a fixed cost of compensation and deal with productivity and staffing from a purely 1:1 perspective (if the person wasn't generating enough to justify their salary, they didn't tend to stay around very long). This is not a position that can be (or should be) maintained for long in this industry as there is too much bottom line impact that the truck finders, brokers, customer service reps, account managers, and sales reps have on the business.