Introduction

Most bosses or HR executives, when designing compensation, first consider cost, then the minimum acceptable salary for sales personnel, and rarely consider incentives. In other words, most distributors have not fully considered: how to design compensation that truly motivates your employees.

According to the author's survey, most distributors, when designing compensation, first consider cost, then the minimum acceptable salary for sales personnel, and rarely consider incentives. That is to say, most distributors have not fully considered: how to design compensation that truly inspires your employees.

To design a good compensation system, you must understand why your employees work and how to make them work hard. Bosses with work experience generally understand employee needs relatively well.

First, employees need a sense of security. That is, compensation must provide basic security. This security is not necessarily about the level of pay; for example, contracts or agreements can make employees feel secure. With security, they can work with peace of mind.

Second, employees need hope. That is, if they do well, how will they be rewarded? This is precisely what many FMCG distributors lack. Most distributors fail to give employees hope. Many employees may work for you just to make a living, with no motivation at all.

Third, employees need pressure. Pressure is not applied through management but through goals. The author observes that most distributors apply pressure through management, which is a mistake. The correct approach is to transmit pressure by setting and achieving goals, and to master the appropriate level.

Fourth, reflect the value of effort. This means that the compensation you set must match the goals to be achieved. Employees will only be willing to work hard if their direction and degree of effort match the compensation. Therefore, the assessment points must be corresponding. You cannot leave employees without direction, nor can you ignore their efforts.

Fifth, quantify assessment indicators as much as possible. Eliminate verbal promises like "work hard and you'll be rewarded." What does "doing well" mean? What exactly should be done well? To what extent? Employees will feel fooled, and some distributor bosses are indeed fooling them, with predictable results.

Sixth, consider practical management issues. For example, if employee turnover is too fast, you can use year-end bonuses or seniority bonuses to lock them in. If employees are older and management methods cannot be improved, then set goals to improve performance. If regional employees generally prefer to start their own businesses, you can integrate them as business partners, etc.

When actually formulating compensation, consider the following factors:

  1. How many people do I need to hire? This is discussed in detail in the author's previous article, "How Big a Team Do You Need?"
  2. What performance do I want them to achieve? Plan sales targets in advance.
  3. Which products or markets will I assign to them? Without defined markets or products, accurate assessment is impossible.
  4. How much cost do I plan to invest? Used to calculate compensation.
  5. My expectations and goal setting. What is the planned base salary? What is the minimum expected task volume? If the target task amount is completed, what reward is planned?
  6. Set up a compensation assessment mechanism. For example, minimum target, assessment target, and sprint target. Complete the minimum target, what salary? Complete the assessment target, what salary? Complete the sprint target, what salary? Convert these numbers into formulas. For example, complete the minimum target at 3% reward, complete the assessment target at 4%, and complete the sprint target at 5%.

Below is a recommended compensation design method for reference:

First, plan to assign several brands' products to Salesperson A. In the past, sales for these brands were 500,000 yuan. After assigning to A, plan to increase performance by 300,000 yuan. The minimum increase target is an excess of 200,000, the assessment target is an excess of 300,000, and the sprint sales target is an excess of 400,000.

Second, base salary, also called responsibility base salary, assume it is 3,000 yuan, with the requirement that sales do not decline compared to the same period. This 3,000 yuan is equivalent to a service fee. As long as there is no decline, the 3,000 yuan is paid. If there is a decline, it is calculated by percentage. For example, if it declines by 10%, then the base salary is only 3,000 * 90% = 2,700 yuan.

Third, commission salary, calculated based on the portion exceeding last year's sales. Assume that if the salesperson exceeds last year's sales by up to 300,000 yuan, the commission is 8%; if exceeding 400,000 yuan, the commission is 10%; if exceeding 400,000 yuan or more, the commission is 12%.

Fourth, quarterly bonus and year-end bonus: If there is an excess, calculate the excess portion at 8% each quarter; at year-end, calculate the exact excess amount. For example, if after year-end calculation it should be uniformly at 10% commission, then settle at year-end, making up or deducting accordingly. If an employee leaves early, any extra points cannot be compensated.

Fifth, work performance award: Each month, employees who are active, responsible, and have good customer relationships can be given additional rewards. It is best to announce the reward in advance so employees have a goal.

Sixth, paid annual leave. Annual leave is not exclusive to large enterprises; small businesses should have it even more. For example, after one year of work, give 5 days. You can also give family visit leave, etc., to increase employees' sense of belonging.

Seventh, irregular red envelopes. For employees who perform excellently or make contributions, you can give red envelopes at appropriate times. This is very effective in building rapport and giving employees surprises. Of course, this incentive should not be too frequent.

Eighth, special product rewards. When promoting certain products, you can add rewards. For example, next month you want to promote a certain shampoo; for each unit sold, give an additional 50 yuan.

Ninth, new customer development reward. For customers who have not cooperated before and are developed this time, you can give additional rewards. For example, for each new customer added, regardless of order amount, directly reward 100 yuan.

Tenth, achievement reward. For some excellent employees, based on their performance, you can set positions, such as starting as manager, then senior manager after a period, and then director if they are even better. Employees will feel better about themselves, which is also a form of motivation. If the team is large enough, that's best; with management levels, career planning is easier to complete, thus forming a complete sales team.

In summary, there are many ways to motivate employees. The key is to understand their needs, follow principles, and based on your own characteristics, develop a compensation incentive system that truly suits you.

-END-

China's best FMCG distributor learning platform Focusing on providing professional, practical, and applicable tutorials for enterprises and distributors Committed to helping Chinese FMCG distributors grow rapidly

The most professional and practical knowledge base in the FMCG industry

Reply with the red number below to get corresponding content Reply with number 1 to view the complete knowledge base

| 001 Excellent Article Selection | 002 Distributor Market Operations | 003 Terminal Visit Management | 004 Sales Supervisor Skills | 005 Sales Improvement Techniques | 006 Channel Expansion | 007 Managing Distributors | 008 Distributor Development | 009 Distributor Internal Operations Management | 010 Team Management | 011 Efficient Distribution Techniques | 012 Sales Manager's Eighteen Skills | 013 KA Operation Methods and Strategies | 014 First Lesson for New Salespeople | 015 Internet, Brands | 016 Distributor B2B Transformation |

[Long press QR code to follow]