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Halloween is all about spooky stuff; monsters of all kinds, vampires and other undead creatures, evil pirates, killer bunnies… But the world of Sales Performance can also be a very scary place. Today seems to be a good time to share another horror story.
The story goes like this: Eircom, the principal provider of fixed-line telecommunications services in Ireland, is not having the greatest year. When they realized that things were not going as well as they should, they decided to take some drastic measures.
First, they decided not to pay bonus commissions to sales staff for the first three months of 2009. They also decided to cut costs by canceling bonuses due to some sales staff from 2008. As if things couldn’t get worse for Eircom’s sales force, they also decided to cancel performance-related bonuses for this year and for the coming two years!
http://www.irishtimes.com/newspaper/finance/2009/0425/1224245377673.html
Many companies have had to face cash flow problems over the last year and have reacted in one of two ways with respect to Sales Performance. Cut incentive programs like Eircom did, and as a result destroy the motivation of the entire staff, or embrace it and recognize the paying employees for their performance is the best way to become more competitive.
What do you think?
I am very familiar with this one.
This particular company has never had a very strong incentive program except for the enterprise teams. With the employment market the way it is in the Ireland they can make this move & probably not suffer too much churn.
Having previously been a state owned company to not successfully making the transition to a commercial animal many people have the job for life mindset.
It seems crazy rather than uplifting quotas and thresholds that align to the financial objectives, they decide to eradicate bonuses not just for 1 year but 3 years.
Look at the brightside if you ever want to buy something from them, you will never get the hard sell.
Hi Rory,
Thanks for the insight! It is true you may never get the hard sell, but their sales rep might not be particularly motivated / helpful.
Employees leaving for a competitor is a big problem, but an unmotivated salesforce can probably be as bad - and the damage lasting beyond 3 years.
Julien