Frankly that kind of commission plan creates sand-bagging. Expect the high achievers to finish on 150% and a great start to the next year!
Cisco has instituted a cap on the commissions it pays to sales staff, The Register has learned. A Cisco staffer tells us that some account managers could lose as much as 25 per cent of their compensation, due to an edict sent out last week. The new is retroactive, meaning the company will attempt to recover some commissions it …
"A Cisco staffer tells us that some account managers could lose as much as 25 per cent of their compensation"
Yet again we have a word to obfuscate high levels of pay. Why do these uber salesmen or CEO's or Non-Execs etc. need 'compensating' to donate their precious time and magical skills to help us poor salaried mortals and our otherwise doomed companies.. What would they rather be doing instead ?, and if it is so attractive why can't we all have a go??
Too funny. Apparently you've never been in sales. You can have a go... try it! You'll soon learn it's survival of the fittest, if you can't deliver you won't be eating. Sales is probably the area where ability to produce for your employer and your compensation are the most tightly linked. There's no such thing as an overpaid sales guy.
Without further changes or information on those changes, it sure sounds like a crap plan to save a few $$$. As above commentards have mentioned, it's a great way to convince sales people that they're not valued; your best will leave immediately, the others who stay behind will merely be demoralized.
Let's see what happens in a year. I'm guessing they lose a couple of % of that 70% marketshare in about a year, more if they keep this policy in the long term.
Chuck doesn't like it when sales folk act like they are too valuable. "I am in charge, damn you! You'll get what I say and like it!"
Remember, every ten cents Cisco's stock goes down is about a billion dollars in market cap. When CSCO misses a quarter by a million or so and five bucks gets shorn off its share price, I wonder how smart this move will look then?
At the Cisco global sales meeting in Las Vegas (August 2015), Chuck Robbins announced the lifting of the commission cap for sales people. The feedback was very positive. Worth noting that this would only impact 2-3% of the global sales force (the super high end achievers).
Cisco is now in the middle of their Q4 with the sales people working hard to close as much business as they can before the end of the fiscal year. The timing of the change (I would call it a renege) couldn't be worse.
The Cisco sales force was told 10 months ago to go sell lots of stuff and no matter how much they over achieved on their sales plan, Cisco would pay them. Now Cisco comes back with "just joking - not really".
Capping sales people is a very dangerous business in my humble opinion, it creates completely the wrong sort of behaviour in terms of 'sand bagging' and not driving over achievement. Businesses seem to use capping when their management layer is simply not good enough to set the right targets! Perhaps CISCO should review it's target setting and management team instead of penalising the people who are selling their products?
Good news for Juniper, HP, Dell, VMware and all CISCO competitors who don't penalise their sales people for being good at their job!!
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