Rats can be trained to do amazing things. By providing food rewards and/or mild electric shocks scientists have conditioned rats to use a litter box, recognize different languages, and even sniff out Tuberculosis.
Have companies trained their employees to behave like rats? When I think of commissioned sales I can't help thinking about those rats. "Be nice to the next person who calls and I'll give you a treat!" What ever happened to the notion of: "Do a good job for the company because...it's your JOB..., because you take pride in your work..., because you're not a rat"?
The cynic will say: "Behavior modification works."
Sure it works. But with humans the rewards and punishment don't have to be immediate. Paying fair salaries, praising good work, and respecting the opinions of the people you work with goes a long way. Promoting and giving raises to people who've earned them, and dismissing those who don't meet expectations establishes a much stronger, forward looking culture. There are tangible benefits to this type of system as well:
- It doesn't generate fights over who gets the credit. It may be annoying when a co-worker claims credit for one of your good ideas, but not nearly so much as if it takes money out of your next paycheck. Well run companies know who their stars are and aren't fooled by the pretenders.
- It doesn't provide incentive to cheat the system. Every company with a commissioned sales force can give a long list of frauds employees have perpetrated to make a buck.
- It doesn't require the company to create elaborate mechanisms to prevent 1 & 2.
- It keeps folks focused on what's best for the company. For example, consider the hostility with which commissioned sales folks greeted websites and in-store kiosks.
- It recognizes that there is such a thing as a bad sale: whether it's signing a client who has unrealistic goals, or selling too much computer to a senior citizen who just wants email. The short term benefits are vastly outweighed by the long term consequences to your brand.
- Like MBO goals in general: what's right for the company isn't always factored into the goals and usually can't be. The "right" thing isn't always cut and dry, and often changes depending on the circumstances. How many times have you seen companies role out unprofitable promotions at the end of a fiscal quarter just to hit some bogus top line goal? Stupid, but very common.
I will probably be accused of being "old school". Guilty. Undoubtedly, someone will point to case studies showing MBO goals leading to tremendous performance improvements. I don't find that compelling logic. If a company hires poorly and/or manages poorly perhaps retraining staff with immediate carrots and sticks will raise performance levels, but that doesn't mean it's the right way to manage.
By hiring people who take pride in their work -- encouraging them to do what's right for the company, compensating them for consistently performing well, and firing those who perform poorly -- quality people will rise to the challenge.
Clearly, this won't work in every business. Paying fruit pickers by the peck makes sense, as migrant workers can't develop long-term loyalties, and the goals really are pretty easily defined. But I don't think it makes sense to treat professionals like migrant workers.
Indeed it strikes me that much of the commissioned sales/MBO garbage simply serves to "eliminate the need" for prudent management. If employee compensation is based strictly on meeting objectives then management doesn't need to think about hiring, and doesn't need to provide expensive training or supervision. Hire bunches, let them cannibalize each other; the strong survive, the weak quit and the management doesn't need to go through that icky business of firing people.
Maybe this works financially in the short term, but what happens to a company's brand in all that mess? Maybe no one cares anymore? When the goal is simply to inflate a top line and sell the company for a quick profit, maybe reputation doesn't matter.
I prefer to work for a company built to last for generations, and I think customers and clients can tell the difference, too.