Commission-based payment has its share of merits and demerits both to the employer and the employee. To the employers, the main advantage is the reduction of labour costs and to employees, the opportunity to earn as much as they can. The main demerit may be the excessive focus on monetary gain, which can lead to a lack of collaboration. In an attempt of accumulating ‘enough’ money, the sales agents may implement strategies that speak of unhealthy competition, thus ruining the company’s reputation.
As an HR, you are not exempted from ensuring healthy competition in the sales team. Although this may look like the responsibility of a sales executive, your involvement is highly required.
You are responsible for ensuring that each person upholds the core values, recruiting the best people and retaining, talent development, training, reward management, and other activities. Since you are also responsible for ensuring and nurturing positive leadership, there is a need to work with the sales managers to ensure that sales representatives are stretching beyond their limits to meet the targets while also competing healthily.
So, what is the difference between healthy and unhealthy competition? And what can you do to ensure healthy competition? These shall be provided in this article.
Healthy vs unhealthy competition
After a briefing about a company’s products and services, a significant number of sales managers send representatives off into the field to deliver the results. This is a risky move. Since the candidates will be representing the company, there is a need for frequent intervention to ensure that they are representing it well by implementing ethical selling tactics.
Simply put, unhealthy competition is based on fear and the need for attention. Fear of falling short of expectations, losing the job, or not making enough money. The healthy competition focuses on the company’s common good, and individuals help each other achieve the set goals. With unhealthy competition, sales representatives can do anything to achieve their targets. They can:
- Withhold crucial information that would have otherwise impact the decision to purchase a product or service
- Diminish their colleagues’ efforts to attract a potential client
- Exaggerate the features and uses of a product or service to make a sale
- Engage in unethical practices
All these activities can damage the company’s reputation and reduce the possibility of future business opportunities, which is why, as an HR, you should get involved with the sales team. After all, if the candidates do the unimaginable, you as the human resources manager will have to answer to the public.
How can you, as an HR, ensure healthy competition in the sales team?
1.Recruit candidates who have a track record of collaborating with others
More often than not, when recruiting in the sales team, many recruiters look at the numbers achieved over time. While this is necessary, focusing only on this aspect may not give a clear picture of the extents to which the candidates went to achieve the volumes. And since you do not want to hire a candidate who has engaged in unethical practices to get the numbers, choose a recruitment firm that fully understands the need for proper candidate selection.
2. Recruit sales managers who are active
One reason why sales agents opt to do ‘anything’ to meet their targets is that they have been given strict orders and left to figure out how to achieve their targets. For a healthy competition, hire managers who are active and driven to ensure the company’s continued growth. Our training on leadership and management can help the sales leaders to develop these skills.
3. Educate about unhealthy competition and ethical practices
Unhealthy competition can manifest in many ways. And sometimes, sales agents may not distinguish between being quick and smart in closing deals and diminishing their teammates’ efforts. Educating is an ideal way of ensuring that they know the difference and are trending on the right side.
4. Respond to unhealthy competition
How will you handle employees who engage in unhealthy competition?
Address all forms of misconduct and emphasize the need for upholding the core values of the company.
5. Assist in setting realistic goals
Another reason why sales agents may do anything to get the volumes is unrealistic goals placed on them. Before sending the candidates off to the field, collaborate with the relevant executives in performing thorough market research. This will help you to understand consumer needs and the capacity of your team to meet certain objectives. From this, set realistic goals that will challenge the team and not instil fear.
6. Offer training
As a human resources professional, you are responsible for choosing training to boost the company’s performance. Our training in sales and marketing is essential for ensuring that your sales team is working for the company’s common good. The information offered comes in handy in handling different types of customers that the sales candidates may encounter.
7. Limit the punishments for low performance
How are low performers treated in your company?
In many cases, low performers are threatened with job termination, which instils more fear and pushes them to engage in any activity that would guarantee a sale. Although a push is necessary, there is a need to limit the punishments and give room for correction.
For instance, are there economic or product design challenges that may be causing low sales? Because despite the efforts, if the economy is suffering or the product flawed, the candidates may not attain the numbers.
Look not only at the candidate but also the market needs and the suitability of the products and services.
8. Proper compensation
Sales representatives who are well compensated are more likely to uphold the company’s core values when seeking clients than those earning very little. A salary survey would come in handy in ensuring that you are offering competitive plans.
9. Allocate resources/regions well
Allocating resources/regions well will keep sales agents from fighting or diminishing each other to grab certain prospects’ attention.
10. Encourage cooperation
Another way of promoting healthy competition is by encouraging employees to share their selling tactics with others. With that spirit, they will not diminish each other’s efforts or engage in potentially harmful activities just to close a deal.
11. Investigate your team’s activities
How are the candidates getting clients?
Investigating will challenge the candidates to engage only in ethical practices when seeking clients. It also ensures that if there are any unethical practices, they are recognized before they gather roots.
12. Embrace individually
Each person is uniquely gifted, and this will reflect in the sales figures. If you must compare individuals, let it be to motivate and guide rather than diminishing others’ efforts. This is a sure way of preventing grudges and unethical engagements to reach certain sales levels.
13. Help where needed
Sometimes candidates present the challenges that they are facing when trying to close deals. Rather than turning a blind eye to it, help where necessary. This will ward off the fear that creeps in whenever the deadline for certain goals nears.
Commission-based payments are not inherently wrong. However, if employees are left to make their own choices, they may do whatever it takes, even the unethical, to make a transaction. Your goal should be to work with the executives to ensure that sales representatives are upholding the core values of the company while working to meet the targets.