Have a situation with a contractor’s payment arrangements and wanted to see if anyone had any creative alternatives.
I moved out here last January to take over a new territory. The previous rep had 2 associates that I kept on a trial basis and kept their current compensation plans in place. I let one go last May and still have one.
She sells accessories which is a small division that was added to my main division a few years ago. She has been on a base salary of $48,000 since the beginning, but it’s clear that the commissions coming in from her division do not warrant me paying her that much. For all of 2020, her division brought in $48,600 in commissions, so I made a whopping $600 after paying her. But, she doesn’t have anything to do with the account that did roughly half of that amount, so really just coming out of my pocket for half of her pay. A couple months ago I sat her down and let her know that we’d be going to a straight commission split beginning Q2, she gets 80% of total commissions for the division. Just got the commission report and her check will be $533...which is actually quite a bit lower than typical, but it is, what it is. I sent it to her and I guess it finally sunk in that the gravy train is coming to a halt and she understandably balked. We spoke and I told her that I would agree to pay her the $2000/two weeks through April and in the mean time we will come up with an agreeable arrangement for both of us. Told her to come up with 2-3 ideas and I would do the same. Also advised that the commission only structure is 100% uncapped and she can make as much as she possibly wants to.
The company I contract with requires that I have an associate for this division and she is actually pretty good, makes both of us sound really smart when talking to higher ups, etc. So I’d prefer not to lose her and have to go find, hire & train someone else. I get paid 100% commission.
Personally, I like the straight commission model and the inherent motivation that goes along with that, but at these dollar amounts it just really doesn’t make a living for her while being beneficial to me besides keeping the company off my ass to hire someone. I am thinking of some sort of base + bonus for hitting growth goals or possibly some sort of a draw system but wanted to see if any of you had any other creative plans that may have worked for you in the past.
TL;DR-
Does anyone have any creative ideas for compensation plans that have worked for them/their people?
I moved out here last January to take over a new territory. The previous rep had 2 associates that I kept on a trial basis and kept their current compensation plans in place. I let one go last May and still have one.
She sells accessories which is a small division that was added to my main division a few years ago. She has been on a base salary of $48,000 since the beginning, but it’s clear that the commissions coming in from her division do not warrant me paying her that much. For all of 2020, her division brought in $48,600 in commissions, so I made a whopping $600 after paying her. But, she doesn’t have anything to do with the account that did roughly half of that amount, so really just coming out of my pocket for half of her pay. A couple months ago I sat her down and let her know that we’d be going to a straight commission split beginning Q2, she gets 80% of total commissions for the division. Just got the commission report and her check will be $533...which is actually quite a bit lower than typical, but it is, what it is. I sent it to her and I guess it finally sunk in that the gravy train is coming to a halt and she understandably balked. We spoke and I told her that I would agree to pay her the $2000/two weeks through April and in the mean time we will come up with an agreeable arrangement for both of us. Told her to come up with 2-3 ideas and I would do the same. Also advised that the commission only structure is 100% uncapped and she can make as much as she possibly wants to.
The company I contract with requires that I have an associate for this division and she is actually pretty good, makes both of us sound really smart when talking to higher ups, etc. So I’d prefer not to lose her and have to go find, hire & train someone else. I get paid 100% commission.
Personally, I like the straight commission model and the inherent motivation that goes along with that, but at these dollar amounts it just really doesn’t make a living for her while being beneficial to me besides keeping the company off my ass to hire someone. I am thinking of some sort of base + bonus for hitting growth goals or possibly some sort of a draw system but wanted to see if any of you had any other creative plans that may have worked for you in the past.
TL;DR-
Does anyone have any creative ideas for compensation plans that have worked for them/their people?
