Reply to post: Re: Wondering why most companies

Getronics CEO on HMRC winding-up petition: An 'embarrassing' blip with cash in the wrong places

Graham Cobb Silver badge

Re: Wondering why most companies

Probably the biggest reason is that the salespeople will not agree they should be paid less if the delivery team screw up and trash the margin.

The second reason is that they won't wait -- they want to get the cash as soon as the deal is signed. That is how you incentivise them to close (especially when you need them to close by a deadline).

And the third is that management decide whether they will accept the price. If they choose to buy market share, or enter a new market at a loss, that isn't the sales person's fault. You incentivise the sales person to get the highest price they can get and management decide if it is good enough. If so, they pay the commission.

You can argue that sales commission is a bad thing, but the bottom line is that is what motivates the sort of people you need doing that job. Just like providing your engineers toys and time for personal projects motivates them.

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