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Topics Covered: <a href='/resources/search/?query=performance compensation'>performance compensation</a> | <a href='/resources/search/?query=Sales Management'>Sales Management</a>
Talent & Recruitment
Aug 10, 2017 | David Johnston lock

We are currently in the era of the superstar athlete, where individuals that are the elite of their sport can make millions of dollars per year, on contracts spanning many years. While there is consensus, that these individuals should make more than the average player, there is considerable controversy over how much even the best athlete in any sport is worth.

The player (and particularly their agent who gets a cut of the contract) will say that they deserve a share of the financial success of the team, particularly if they lead the team to a championship.  

They also subscribe to the free market” approach, which says that supply and demand, should determine how much the best should get paid. It should not be surprising then that the high performing, elite salesperson (especially those that are critical to the company making their sales targets) should want to be rewarded in the same way.

In the past, companies were hesitant to treat one employee differently than others in the same job. This structured approach to employee relations complemented the hierarchical structure of the organization and the “gatekeeper” mentality of the Human Resources (then Personnel) department.

Today, the fragmented and ever-changing nature of the business environment has necessitated a different approach to structuring the employment relationship. Like professional sports, employees today have much more of a “free agent” approach to their work situation. Many employees will have several employers during their career and will often “sell” themselves to the highest bidder for their services. Their allegiance is to their career goals not to their employer. Employment contracts (not dissimilar to those in sports) are becoming increasingly popular, particularly in situations where the company does not want to tie itself into a full-time employment situation.

High performers have always been a problem for sales managers, in that they expose the vulnerability of the organization should they leave. Loss of a top salesperson can result not only an opportunity cost (i.e.: less sales due to the time it takes for a new salesperson to assume the individual’s territory/customers), but also a real revenue loss through losing the customer.

There are also other issues that have increased the complexity of the high performer retention problem with sales organizations:

Ownership: Who Owns the Customer?

In many cases, the high performer has the relationship with the customer, not the company. In these situations, the top performer can dictate terms, especially if they are managing major or strategic accounts. It is important with high performing salespeople, that the company owns the accounts, but that they treat the individual appropriately for their delivery of expected results.

Management and Culture: How Much are Salespeople Valued?

Every organization is different in the way that they approach sales and the value they put on the contribution of their salespeople. Issues such as sales of new versus renewal business, sales effort versus account management and direct versus channel sales all have a value that must be assessed and valued by company management. Top performing salespeople often leave their organization not just because they can make better money elsewhere, but often because they do not feel that their efforts (both in sales and other non sales or account/channel management) are appreciated.

These issues are part of the strategic discussions that must be held before addressing sales compensation and the retention of the “Superstar” sales performers.

Companies that focus on, and invest in, the relationship with their top salespeople have been shown to attract and retain them better than those who do not. The risks associated with not creating a win-win scenario with your high performers strongly outweigh the costs.

Elite athletes are very rare, and when these “assets” are lost, they significantly impact the performance of the team. The same can be said for the “elite” salesperson. Their loss to the sales team can have a significant impact on the company’s ability to achieve their business goals. Don’t give away the franchise!

About the Author: 
David Johnston is President of Sales Resource Group Inc. He has a broad, international consulting background and offers experience, active participation and a Sales Resource Group approach to consulting with clients.

David has nearly 30 years’ experience consulting for organizations in diverse fields, such as broadcast and print media, pharmaceuticals, telecommunications, information technology, retail, manufacturing and financial services.

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