The same salary, paid in different ways, can lead to vastly different outcomes. Some distributors pay cleverly, motivating employees and strengthening management; others pay generously but fail to retain talent or improve profits. This involves the issue of salary balance in distributor management. So how should distributors pay their employees?
From 'base salary' to 'basic wage': a change in name, a difference in meaning
Generally, the salary structure of a distributor company is simple, mostly base salary plus commission. However, Manager Tian from Henan adopted a salary model of basic wage + assessment wage + bonus. These two salary models are essentially no different, only the names have changed. Manager Tian believes that replacing 'base salary' with 'basic wage' and 'commission' with 'assessment wage' may only be a change in name, but the meaning is quite different.
First, using names like 'basic wage', 'assessment wage', and 'bonus' is more humane. 'Base salary' gives employees the feeling that they are laborers, earning money day by day. In contrast, 'basic wage' implies that they are doing a job and receiving a salary. This psychologically gives employees a sense of belonging. 'Bonus' has the dual meaning of welfare and incentive, providing employees with extra benefits.
Second, Manager Tian believes his salary model makes it easier to manage employees in detail. The 'basic wage' he pays includes many components. For example, the basic wage is 900 yuan, which includes 100 yuan for phone, 100 yuan for transportation, 100 yuan for perfect attendance, 50 yuan for summer heat allowance, 50 yuan for meal allowance, and 100 yuan for overtime (broken down by time period, e.g., 20 yuan for 6-8 PM).
The 'assessment wage' also consists of several parts, with the main one being sales commission, which is divided into different ratios: for example, 1% for completing 50%, 1.5% for completing 80%, and 2% for completing 100%. Additionally, assessment items include details such as terminal display. Through these detailed indicators, Manager Tian achieves fine management of employees.
Setting salaries based on age structure
Distributors also differ in their choice of employees. Some prefer employees over 30, believing they are experienced and stable, unlikely to switch jobs easily; others prefer employees between 20 and 30, thinking such teams are energetic and driven, able to drive the company's continuous development. Therefore, based on the age structure of employees, distributors adopt different salary methods.
Manager Zhou from Liaoning has employees over 30. In addition to fixed salaries, Manager Zhou also provides 'three insurances and one fund' (pension, unemployment, life insurance, and housing fund) for employees, addressing their concerns. As a result, employees cherish their job opportunities, treat company matters as their own, and some older employees proactively communicate with Manager Zhou to correct mistakes. Manager Zhou is reassured that during his business trips, the company operates normally, and some employees even advance market expenses.
Unlike Manager Zhou, Manager Wu from Shandong has a predominantly young workforce. They do not place much importance on pension insurance but consider how much they can earn now. Therefore, Manager Wu does not provide pension insurance but increases seniority pay. Generally, new employees go through a probation period, and after becoming regular, they receive basic wages. During this period, Manager Wu assesses new employees to identify and retain outstanding performers. He pays a basic wage of 900 yuan, and after one year of work, employees receive an additional 150 yuan in seniority pay. Why 150 yuan? Manager Wu explains that in his region, 100 yuan is too little, and 200 yuan exceeds his overall salary budget, so he takes an average, which is not too burdensome. Additionally, the 150 yuan is paid in installments: 100 yuan after six months, and the full 150 yuan after one year. Through this method, Manager Wu retains a large number of excellent new employees.
Designing salary systems based on organizational structure
Most distributor companies have similar organizational structures. In such structures, the deputy general manager assists the general manager in overall work, and their basic salary model is basic wage + year-end bonus.
Business managers play an important role in distributor companies, directly affecting whether the distributor's plans can be smoothly implemented. Generally, business managers are relatively stable. They come from four main sources: first, relatives of the distributor; second, those who followed the distributor before the company grew and naturally became 'founding heroes' and business managers; third, salespeople and business managers from manufacturers discovered during cooperation, who share similar values and are recruited; fourth, business backbone poached from other distributors. These business managers maintain close relationships with the distributor. Moreover, since the distributor's network and channels are mature, if a business manager switches jobs, the new distributor gives them limited time to show results, often creating pressure. Therefore, business managers are relatively stable. For business managers, distributors basically adopt the same salary model as deputy general managers but add task assessments.
Promoters, merchandisers (mostly in supermarkets), and salespeople are the most basic execution staff. Promoters' salary structure is base salary + commission + extra rewards. Merchandisers have simple tasks, mainly execution, with a salary structure of base salary + task assessment + commission, where task assessment is detailed, such as product placement and shelf tidiness, but their commission is much lower than promoters. Salespeople's salary structure is base salary + allowance + commission (sales) + monthly (annual) rewards. In monthly (annual) rewards, many distributors use a vague approach, selecting the best salesperson each month and giving varying amounts of bonuses.
Setting salary systems based on actual conditions
Manager Chen, a beverage distributor in Hebei, adjusted the salary system for direct salespeople in the second month of distribution to strengthen employee motivation and promote sales and profit improvement: for selling any specification or grade of the company's beverage, if sales are below 1,000 cases, they receive a base salary of 700 yuan; for sales exceeding 1,000 cases, they receive a commission of 0.5 yuan per case for the excess. After the adjustment, Manager Chen found that sales did not rise as expected. Later investigation revealed that because the product was newly launched locally and lacked awareness, the 1,000-case target was hard to achieve. Since the company stipulated that sales below 1,000 cases still earned the base salary, selling 999 cases and selling 100 cases were the same. Therefore, salespeople thought they would not get commission anyway and gave up trying, letting products sell naturally, at worst getting the 700 yuan base salary. Moreover, the policy of not differentiating by specification or price led salespeople to push cheap categories, causing a severe imbalance in product structure and ultimately a decline in product profits. As a result, the newly established market was disrupted by their own people, and salespeople lost motivation. From Manager Chen's case, we can see that his salary system was severely detached from market reality, resulting in a double loss in profit and management.
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