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Sales Compensation (Part II)--Bread and Circuses

April 1998
To feed or divert a discontented populace, the ancient Romans offered bread and circuses. And, to a certain extent, they met with success. Their idea lingers in today's world of graphic arts sales compensation; some printers pay straight salaries to their sales forces, while other printers add various incentives and bonuses.

Despite what many consider to be the intrinsic nature of motivation, incentive plans can help boost individual performance in certain situations. In this second of two installments (see March issue, page 56), Printing Impressions reviews incentive plans and other issues relative to commercial printing sales compensation. Various industry players share their thoughts and experiences.

"We try to keep compensation in line with industry standards," reveals Ron Bray, chairman of the board of French Bray, in Glen Burnie, MD. "But dangling carrots in front of salespeople when they do exceptionally well also helps." French Bray rewards reps for the attainment of monthly/yearly sales goals, as well as maintaining an existing client base.

Throughout the year, Bray conducts an ongoing point system contest to promote new and existing business. Sales reps who meet a monthly budget will receive 1,000 points; they garner 5,000 points for meeting projected yearly sales; and 1,000 points for exceeding quarterly sales by $20,000. The salesperson with the highest number of points wins a trip or some other prize.

"French Bray also has an incentive plan based on profitability," notes Bray. "We set a percentage of profit that we're trying to achieve. If we attain our goal, the funds are weighted according to what [the salesperson] normally earns. If pre-tax profits exceed the goal, then a percentage would be taken and distributed to all non-union personnel after receipt of our year end audited report."

By contrast, Jeffrey Spear, president and CEO of The John C. Otto Co., in East Meadowland, MA (now part of Houston-based Consolidated Graphics), questions the importance of incentive plans. "If you are a cost leader in your market, you have plenty of money to pay your sales force well," states Spear. "We pay a draw against commission and everyone gets paid plus or minus the same amount."

As a former salesperson, one sales manager (who preferred to remain anonymous) for a $36 million Midwestern web and sheetfed label printer, has never been enrolled in an incentive plan and does not use one at his current company. "They're not needed if your compensation package is done properly," he says. "We pay 100-percent expenses. But incentives can be a good idea because some compensation programs may have ceilings and limitations."
 

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