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Preface: Regardless of the period, region, market conditions, or products being handled, salespeople are the foundation of sales work. Therefore, how to motivate sales staff's enthusiasm while ensuring the strategic intentions of senior leadership are implemented has become an extremely important issue for manufacturers and distributors to solve. Among the many ways to address this, adjusting the salary structure of sales personnel is the most direct and effective method. Hence, this article will provide a detailed explanation on how to build a salary system for sales staff, hoping to be helpful to liquor enterprise leaders and distributor friends.
To clarify the salary system, three aspects must be explained:
- Components of the salary system: Simply put, what constitutes a salesperson's income, i.e., "what money is paid."
- Objective elements of the salary system: Factors that affect the salary level of salespeople, or more directly, "why money is paid."
- Methods of linking salary components with objective elements: The way certain parts of a salesperson's salary fluctuate due to certain factors, such as increasing fixed amounts, deducting by proportion, or multiplying by a coefficient. In short, "how money is paid."
I. Components of the Salary System: Generally, the salary system for sales personnel is divided into the following eight aspects, among which basic salary and sales commission are the most widely used, while other items vary according to the actual situation of each manufacturer and distributor.
- Basic salary: To ensure the basic living needs of sales personnel.
- Sales commission: To reward the sales performance of sales personnel.
- Performance-based salary: To extract key indicators to assess the work process and results of sales personnel.
- Seniority pay: To reward the loyalty of sales personnel.
- Position allowance: Subsidies for positions with special work needs.
- Employee benefits: Insurance, leave, and other hidden benefits, which are important factors in enhancing employees' sense of belonging and maintaining stability.
- Special bonuses: Special rewards for special events or special contributions.
- Year-end bonus: Year-end reward for sales personnel, serving as an overall review and evaluation of the employee's work throughout the year.
II. Objectives of Building the Salary System
- Compensation for job responsibilities
- Rewards and penalties based on work results and effectiveness
- Sales volume: The actual sales volume of the salesperson.
- Overall task completion: The extent to which the salesperson completes their tasks.
- Proportion of leading product sales: The proportion of leading products in the salesperson's sales results.
- Expense usage: The quantity, quality, and effectiveness of expense usage.
- Profit level: The contribution of the employee to the company's profits.
- Team management results: The performance of management functions by management-level employees.
- Market/customer feedback: Customer satisfaction feedback.
- Work process control:
- Work process compliance: The extent to which key indicators are met during the work process.
- Subjective judgment factors: Subjective judgments on the salesperson's initiative, responsibility, etc.
- Team stability
- Loyalty
- Fairness
- Team spirit
- Special contributions/accident rewards and penalties: Certain special contributions or losses.
III. Methods of Linking Relevant Elements with Salary
- Linear method: For each additional XX, add X yuan to the salary. A typical example is piece-rate commission: for each additional item sold, the salesperson earns an additional XX yuan in commission; seniority pay: for each additional year of service, the monthly salary increases by XX yuan. For sales personnel, this is a stable income, relatively fair and reasonable, but the incentive effect is relatively weak, and the company's strategic direction is not clearly guided.
- Step method: Similar to the linear method, but introduces a step reward form, i.e., when a work result reaches XX-XX (value), the salary is paid according to the XX standard. A typical example is task commission: the commission rate within the task is X%, and the commission rate for the excess part is X%. This method sets a goal for sales personnel, indirectly exerting a certain pressure, but the degree of pressure requires the wisdom of leaders. Appropriate pressure is beneficial, but excessive or insufficient pressure may cause adverse reactions in the team.
- Coefficient method: When a work result reaches XX or above, the coefficient is X; when another work result reaches YY, the salary base is Y; the final salary is X × Y. A typical example: The task completion rate (e.g., 150%) serves as the commission coefficient; if the task is not completed, the coefficient is 50%, with a cap of 200%; the piece-rate commission (e.g., 2000 yuan) serves as the base; the final commission amount is the coefficient × base (150% × 2000 = 3000 yuan). Of course, the coefficient method itself is a comprehensive method, where the coefficient and base can be set in a linear or step manner. For sales personnel, the coefficient method is a double stimulus: they must complete basic sales to obtain a higher commission base, and also exceed the target to obtain a higher coefficient. The multiplication of the two in calculating the final commission can make salespeople work desperately. However, this method is both a powerful incentive tool and, if not properly operated or monitored, can easily cause imbalance among sales personnel, leading to dissatisfaction and harming team morale and stability.
Common Methods for Building a Salary System Table In summary, the salary system is essentially a calculation system where salary components and relevant elements fluctuate through special linking methods. When formulating a salary system, we generally follow these steps:
- Determine the company's main tasks at the current stage. Is it sales volume first or market stability first? Is it to ensure payment collection or reduce costs? Is it to promote new products or maintain old ones? These require leaders to have a clear understanding and judgment of the market and the company's development stage.
- Based on the company's development goals, clarify the work objectives that salespeople need to achieve.
- Based on actual conditions, consider which core links need to be incentivized to achieve these work objectives, and which parts of the salary system are suitable for such incentives.
- Select the salary components for sales personnel. Generally, basic salary, commission, and employee benefits are essential; performance assessment, seniority pay, and year-end bonus are added based on the company's strategic goals; subsidies are more about formal fairness than the amount; and special bonus rules reflect the company's values.
- Comprehensively consider the team situation, company goals, and strength to determine the linking method between salary and objectives.
The salary system is a systematic plan that must consider factors such as company and market conditions, development strategic goals, team business level, and internal organizational ecology. However, I believe that as long as one element is firmly grasped, there will be no directional problems: that is, to grasp the work direction and goals that sales personnel need to achieve at this stage. As long as the work objectives of frontline sales personnel are clearly defined, the degree is properly controlled, and some clever details are added, the entire salary system will inevitably radiate new vitality.
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