HP sued by own sales reps
IT vendors are often not much better than their customers when it comes to doing information technology, and sometimes, they are worse. This appears to be the case with a sales force commission tracking system called Omega used by Hewlett-Packard, which has screwed up commissions so badly that three former employees of the …
... at least they aren't using an EDS system.
It's a well known fact that 99% of HP's computing resources are tasked with designing the largest cardboard boxes known to man, as well as the string theory-like maths needed to discover the greatest large box to small object disparity possible.
I would imagine this also means nearly all their analysts and support personal are tasked with maintaining such a complex system, as well as eating up all of the R&D budget left over from the alchemy required to turn precious metals and stones into the incredibly expensive liquid their inkjet cartridges require.
So it really shouldn't come as much of a surprise to the guys in charge of selling this stuff that nothing and no one is left to fix their commission calculating software. Perhaps they could ask for a couple of hp inkjet cartridges to cover their missing commission payments.
"Omega is a legacy commission system that was created by minicomputer maker Digital Equipment."
Omega didn't work right at DEC, either. I'd tell you how I know, but then I'd have to shoot you.
Mine's the T with "Real programmers prefer VAX 11/780s" on the front ... and a picture of a TU56 on the back.
I've seen up-close that the top executives in another IT giant get paid wrong because of silly mistakes, HR stupidity or simply the enormous complexity posed by these people living in 10 countries in 15 years and earning stock in each.
Although I know the pain and suffering caused by legacy systems that nobody wants to pay to replace, I'll bet even odds that in this case it's e.g. HR not providing data on time.
You wouldn't believe the consistent incompetence I've encountered at large corporations' HR departments.
....but I find it hard to feel sorry for these guys, at least they still have jobs and must have been getting paid roughly what they were expecting otherwise this would have been identified earlier.
Tux, because OSS would sort this (Fanboi alert).
I'd outlaw bonuses tomorrow.
It seems that the performance of salesmen is easy to measure, and so they can get paid bonuses. The performance of the engineers that make it all possible is much harder to measure, so they only get paid basic wages.
Why on earth should anyone be paid extra for just doing their job?
If sales people want performance related pay, let them go self employed and become distributors or retailers. If they want a salary, then live off it.
@"john 30"
I'm not sure that the statements....
"....three former employees of the company" & "....at least they still have jobs "
can be directly reconciled.
I suppose even slimey salesgrunts do have mortgages and such to pay, and I'm betting a fair few of them banked on getting their bonuses to pay for their bills/mortgages/holidays/botox.
The surprise is the use of such an antiquated system - didn't hp go through a massive SAP implementation/FUBAR a few years ago? Why didn't they get a modern commission system then? Looks like someone from the Compaq side of the company thought they'd save a few pennies (or impress their new hp masters) by keeping the old system going even when they knew it had faults. And here'e the problem I see for hp - it sounds like the system had known faults but they kept it in use. IANAL, but if they had a contractual obligation to pay bonuses and commission based on performance and they knowingly used a system that had a history of issues and therefore could not be expected to do the job, then they would seem to be liable. If the group suing can provide proof of this and that hp ignored the probelms then I reckon they'll win!
Now, wouldn't that get a few HR teams worried!
So, as a Salesman I do my job, bringing in every penny I'm expected to. But hold on, I've brought in another 15% extra, shouldnt I get a bonus for making sure EVERYONE'S job is a little safer?!
Who's to say that it's down to your brilliant marketing skills, and not down to the product being more polished because of some geek who works 24 hours a day because he enjoys it, and probably doesn't even claim overtime.
If you want the bonus, work for yourself not somebody else.
You make a valid point though, salesmen are typically more motivated by money than say programmers, hence why in the real world they tend to get more bonuses. Nothing to do with their contribution to the company being any greater than the people building/designing whatever it is they're selling. Frankly it sucks, but that's the way of it. Don't expect any sympathy though.
"Why on earth should anyone be paid extra for just doing their job?"
I'm sure that fits in with your world view, but try looking at it this way. You're an engineer. You're paid £x per annum whether you do your job or not. A salesman is paid £z-y per annum and has to do his job to earn his designated salary of £z. Commission for salesmen is NOT a bonus; it's part of their salary. The belief that commission is a bonus is why commission systems in every company are such a low priority.
Cue flamewar.
O
Mine's the one with the not very bulging wallet
As posted by Onionman, a salesman's OTE is essentially their base salary. You get your OTE if you do the job you were employed to do as per expected. You get paid more if you help the company over-achieve but you also get paid less if you miss your targets. And you can miss targets through no fault of your own sometimes, just as easily as you can over-achieve due to luck more than skill. But it is strange how it tends to be the same salespeople who consistently earn the most commission so I guess there is a lot in the saying that you make your own luck! And I'd say that in the current climate where most people are missing their targets due to market conditions more than anything else, I'd much rather be on a basic salary rather than a performance-related one.
As for HP's commission system, I've worked for HP, IBM and others and they are all as flawed as each other. Commission was, is and always will be paid typically later than you would hope and expect and sales people need to be vigilant to ensure they are getting paid their dues. I don't believe it is anything malicious by these organisations but the degree of complexity of organisations once they exceed a critical mass means that any system is always going to struggle. I personally like the good old days where you were paid off your spreadsheet with random audits. That system seemed to work pretty well.
"So, as a Salesman I do my job, bringing in every penny I'm expected to. But hold on, I've brought in another 15% extra, shouldnt I get a bonus for making sure EVERYONE'S job is a little safer?!"
So I do a 48 hr shift because some arsehole in sales has flogged something that we don't do and failed to tell anyone until 5 minutes before live.
Shouldn't I get that pricks bonus to stop us getting our arses sued off? meanwhile said **** gets a big fat bonus, instead of the sack. Yes I'm speaking from many years experience of wiping their arses.
"Sales, the only career you get a bonus for doing the job your paid to do."
That said, still shit if you are promised a wage and you don't get it....
Quote: "Sales, the only career you get a bonus for doing the job your paid to do."
Unfortunately not, at least in hp.
Randy Mott, the so-called CIO and probably a better rockstar than CIO, got 16 million dollars of bonus for 2008 just for doing his job.
Or pretending to do his job. Since IT at hp is these days the Information-Prevention Technology.
Just dreaming: hp gets ordered to pay some hundreds of millions.
And since Mott didn't take care about that buggy Omega system, he comes into the office in the morning, he's escorted by two security guys to his desk, they give him 5 minutes to pick up his personal belongings. Then they show him the way out of the building. What a relief that would be..
So if your sales guys are getting away with flogging something your technical people cant deliver, or aren't aware is coming, you are working for a f***wit company (forecasting, governance etc) - suggest moving to a proper outfit.
Re the whole OTE thing, as a salesperson (and ex-firewall engineer) we get paid a basic (quite small, covers the mortgage) and a big bonus if we hit target - bonus is typically twice as big as basic. The big issue is if you dont hit your target you dont get your basic, because you've been sacked as a result. So the total compensation package is just that - its the salary. The sales engineers with whom I work (non-commissioned) earn more than the sales people some months.
The engineers at my business just move around if they get a better pay offer - easily the most mercenary bunch I've come across. The ones that do stick around disappear on the dot of 5.30, and don't understand that they are part of the money making machine that is 'big business' despite their ability to earn a reasonable end of year bonus based on company performance.
So good on the HP guys for taking them to task, and lets hear it for the sales guys.
"You're an engineer. You're paid £x per annum whether you do your job or not"
Nowhere I've ever worked. If I don't do my job I get the sack, often in the middle of a project.
As a former sales employees exposed directly to the joys of Omega and the surrounding systems that interconnect and don't work - we had many many escalations to Hurd a few years ago all revolving around Omega's suckiness and the general broken ass comp recognition system .. his very own worlds at a sales conference to a few hundred international people - to quote " fixing sales compensation is our #1 priority " seems he's managed to sort alot of things out .. but his #1continues to allude him somehow .. wonder why that is ?
"If I don't do my job I get the sack, often in the middle of a project."
Ditto Salesmen. Often quicker, as it's IMMEDIATELY obvious if you're not doing what you'r epaid to do. Get a grip. Stop behaving like you're some kind of victim.
O
"The ones that do stick around disappear on the dot of 5.30"
What's wrong with that? If you can't finish your work in the allocated time either:
the company is being cheap and under-resourcing,
or
you are crap at your job.
If its the former, being the company bitch and doing stuff for free will not change anything.
Also, we work in a capitalist system, if the company can make more money by firing your arse, they will, there is no loyalty from the company, why the hell should you give loyalty back?
I'm directly affected by the HP Commission system and despite that, do have some sympathy (or is that empathy) simply because it has been no better anywhere else I have worked. I have come to accept that commission will take months to sort out and involve a fair degree of work myself to ensure that everything i sell finds its' way into my achievement. IBM was no better - 9 months after I left IBM I was still getting odd tiny payments from them as worked and reworked achievements. And others have been just as bad. I will say that automation has caused the problems. Back in the day we were paid on trust and the system wasn't abused and people were paid in a timely fashion.
As more information becomes available this may become a controls issue. If this affects the entire sales force at HP the financial implications could be substantial. SOX compliance would dictate that this financial obligation be documented in any financial reporting HP made public. It will also be interesting to see if issues come to light regarding the other systems HP uses to run their business.
Mark, nice try at scare mongering but as a current HP employee I can tell you that my commission is unfortunately pretty much as expected. Much as the commission system might be complex and cumbersome, as have others been in my fairly lengthy experience, there is no widespread panic or concern within HP. In my experience, regardless of who you work for, you rarely get your commission the month you expect it, but get it eventually. Whilst this situation might not be ideal, it's been the case in all my previous employers. As I mentioned earlier, I was still picking up the remnants of my IBM commission 9 months after I left ... and that was without me chasing it or even expecting it. The IBM commission system was just gradually figuring things out. And as for the other systems HP use to run their business ... I suspect you'll find they're just fine. Panic over Mark!
