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CAREER ADVISOR
In this issue, the “Career Advisor” is responding to a question from Egypt: “ my company is imposing a minimum sales achieved benchmark before the sales officers are entitled to a sales incentive or bonus, is this fair?”. All reasonable questions related to careers, skill development or employment related issues – sent to
advisor@skill-link.com
- would be addressed in this section every week.
Q: Is it fair to have the sales incentive / bonus earned after achieving a minimum amount of sales revenues?
I am an Assistant Corporate Relations Manager (sales) in a rapidly growing company. The company’s incentive policy mandates that sales officers are only entitled to bonus / incentive on realized sales once a certain monthly or quarterly figure is reached. Is this fair ? And is it a common practice or am I being abused ?
M. A. - Giza
Replying:
Dear Miss. M
As a rule an employee working for a company earns his/her salary in return for delivering an average performance in a pre determined job role / functions. Above average or outstanding performance deserves to be rewarded with an extra above the regular salary (bonus, incentive, profit sharing etc…). On the other hand a consistent below average or poor performance would normally cause the employee to be terminated (ie. asked to leave).
As per the above, a production engineer for instance will be mandated to produce a certain number of units within a certain period of time and complying with certain quality guidelines or specifications. Management has to set such objectives and determine what reasonably constitutes an average performance.
Similarly in sales, an employee does not get a salary to just show up in the office and keep busy, he or she are paid a salary to sell. The company (employer) management sets what is the sale quota that represent an average / conservative effort for which the employee is earning his / her salary. Alternatively, management can determine what amount of sales justify the salary being paid and what ever sales are achieved above that would deserve an incentive / bonus to the sales person in question. Usually in the form of a percentage.
You should always remember that your cost as an employee to your employer is not only the salary you receive, there are social security contributions, benefits, you take paid vacations and holidays etc… additionally you use space, office equipment, utilities and you use some of management’s time to supervise you, develop your skills etc...
So, in summary the concept you described is fair, what constitutes a reasonable sales benchmark is something both you and your company should be comfortable with.
Note from the editor:
Employer names and inquiry sender names were withheld for confidentiality