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Motivation without commission?

I got into an intense (in a good way) conversation last week with one of my investors about companies where the salespeople don't earn any commission. I won't tell you which side I was on, I'd love to hear opinions.


The argument AGAINST commission: this company is able to motivate their reps to sell without the commission because they bred a culture ($100M in revenue) that is exceptional without it. It also encourages collaboration, allows hiring of non-traditional salespeople, etc.


I don't think I need to tell you the argument for commissions.


So what do you think? Is it possible or is this a one in a million company?


Edit: I guess I should have also included that this company is paying ~$200k "base" (which is the OTE)

๐Ÿ’ฐ Compensation
43
Kinonez
Celebrated Contributor
+9
WR Enthusiast
It is posible, if the base is high enough, (like higher than their previous job with all the commissions included) and the sales reps are learning and their is room to grow, some reps might give it a try. But for many they need commission, itโ€™s implanted in their brains. The salary is for their losses, when ever someone hangs up or shouts at them, and the commissions are for their wins, it gets them happy.ย 

it might be easier to get reps with less experience on this train than veterans. Some might even find it fishy and not even look at the company even with the higher base rate.ย 
salesnerd
WR Officer
+16
Head of Growth
I guess they pay well. I think they're able to be successful because they find people who are willing to deal with all the other nonsense by paying high wages.ย 
Kinonez
Celebrated Contributor
+9
WR Enthusiast
Itโ€™s just weird that they are willing to pay so much as a base than a lower base plus commission. Whatโ€™s the main reason they are not interested in giving commissions?
Show 1 more replies
Jackywaky
Arsonist
+9
Master of Disaster
Hell yeah
funcoupons
WR Officer
+11
Kahluapons
I would never, ever work in non-commissioned sales. I have a feeling that the salespeople who would are not top tier sales talent so while I'm sure a company COULD find people to fill those roles it's still not going to produce the same results than if they had commissioned salespeople.

The exception is if the company is paying 250k+ salaries.
alphapup
Business Development Manager
I'm 35 and have been paid with base + commission my entire working life. Commission is NOT implanted in my brain. I would definitely hear out any company pitching me a 200k sales job that did not include commission - even though my top-end earning right now is probably 250k. I think there's a lot of salespeople out there who would would be happy to make that compromise if the rest of the conditions are right - culture, learning/growth, product, etc.ย 
Go
GoBlue
Old School Bravo
+1
National Account manager
Agreed. All the best.

LordOfWar
Politicker
+6
Director
I'd consider no commission for guaranteed $250k a year, but I'd want one hell of a golden parachute cuz I'd never feel like I had job security. One bad quarter and the boss will be wondering what he's paying $250k for.
funcoupons
WR Officer
+11
Kahluapons
Very true. Would need an airtight contract.
salesnerd
WR Officer
+16
Head of Growth
Well so that's one thing, they apparently pay like $200k base salary (with no commission)ย 
NoSuperhero
Politicker
+6
BDR
Is that fair when they could be winning much more when they (the sales teams) are pulling $100M in revenue?
CaneWolf
Politicker
+12
Call me what you want, just sign the damn contract
I'd be very curious how much they're paying. I would need a guarantee of at least $225k to do this.

And if I'm a salesperson, shouldn't I do just enough to not get fired?
Prunetracey
Contributor
+1
VP Growth
I'm Aussie and our employment laws very much favour the employee (once they've passed their probation period). You'd have everyone doing the bare minimum to not get fired and there's very little the company could do to be rid of them.
This is assuming there's no crazy motivating ESOP involved.
breezyboiii
Politicker
+5
Sales Boiii
Fellow Aussie here and I can confirm this is the case.
Have seen many sales people who have mentally 'checked out' with plans to do something else and have been able to just cruise along doing, in some cases, less than the bare minimum.
Get thrown on a coaching plan, they do just enough to meet that then the cycle continues again.ย 
babbler
VP, Digital Culture
I was thinking along those same lines. In sales it can be relatively easy to hop from company to company. Having a cushy base salary would create room for bare minimum and not continuous growth. Unless of course salary was based on sales. Maybe the first year is $150k. If you sell $XXX in year one, your base salary goes to $175k, and so on.ย 
CaneWolf
Politicker
+12
Call me what you want, just sign the damn contract
Isn't that just commission by a different name then?
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DrunkenArt
Politicker
+5
Sales Associate
I don't think I would do a non-commissioned sales role unless the base was at least 6 figs, then I'll at least have a conversation. I do understand the logic, it'll encourage more honesty in the deal process since someone's worth is not tied to the success of closing a deal.ย 
AldoRaine
Opinionated
+1
Account Executive
I use to work for a company that sounds very similar. great culture, 100M in revenue, and sales people earned 0 commissions.ย 

I joined as an AE when I was super young and it was essentially my first real job. The idea of a high salaried sales job where I got paid no matter what was very enticing.ย 

It quickly soured due to a lot of unkept promises around comp increases. The idea was the more you sell the more we will increase your salary. Have a killer quarter, get a 10-20k bump in your salary. the reality was leadership always found a reason not to give you that raise and would string you along with a never ending series of "one more good quarter and we will get you there" bullshit.

I think they were able to make it work due to them hiring a lot of little to no experience reps that were as naive as i was.

CuriousFox
WR Officer
+11
Needer of Life Alert
Awe hell no cuz. That is NOT cool. They mess with your livelihood that way. Nope nope nope nope.
AldoRaine
Opinionated
+1
Account Executive
Yeah it was bad. Jumped ship pretty quick to collect those PHAT commission checks!ย 

Ill never do no-commission sales againย 

Show 1 more replies
Oz
Ozz
Politicker
+6
Account Executive
Yeah, makes so much sense. Sounds like a trap where you're an SDR and after 18-months you'll get promoted to an AE stuff. Wouldn't touch even if the base was 250K.ย ย 
SlinginSoftware
Politicker
+6
Account Executive
This goes against my religion...Capitalism.ย 

When I see my new commission plan every year, I always decide how much my W2 goal is for the year. From there, I walk backwards to figure out how much I have to sell. The lowest quota attainment I've had is 6 years is 120%. When it's all averaged out, the amount of commission I've made above my OTE has increased my total income by close to 50% EVERY YEAR for 6 years...

If I don't have accelerators or bonuses that I'm working towards, whats my motivation to sell with urgency early?

Also, I'm competitive as hell and want to earn more than my friends and colleagues...
JC10X
Politicker
+8
Senior Sales Manager
Very interesting, what do they mean by non traditional sales people? I think its possible, sure.ย 
salesnerd
WR Officer
+16
Head of Growth
People who don't like the pressure of quotas but might be a good seller.
JC10X
Politicker
+8
Senior Sales Manager
Very cool
Gyro25
Politicker
+6
BDR
Hahahah hell to the no. "Motivate" how? My motivation is my commission. "Culture" is often used as an excuse by companies to fuck you over. If my base was like 100k, maybe. But commission is what keeps reps like me going.ย 
youKNOW
Politicker
+7
Sales Manager
This sounds like what they wanted for communism. Everyone getting paid super well because the culture is awesome and they collaborate well, and they are doing their best for the mothership. At some point...things regress towards a mean. Great culture and collab are awesome, until they aren't good enough, until people find a reason to bitch about something (100% it will happen...fight me). The best sales people are motivated with excellent $$$, AND a great team.ย 
Hudsonsmom
Opinionated
+2
Area Sales Manager
I work in a non-commission based sales role (yearly bonus but no monthly commish) and there is 100% a mix of talent. Lazy people who are there to collect a check and go getters who are top sales people thrown into the mix.
be
bellaccione
Contributor
+3
Sales Consultant (principal)
This is dumb and will never work long-term or throughout an industry.ย 

A product-led-growth company can do this, but the high-base 'salespeople' are really ordertakers.

True sales always works best when the salesperson accrues a % of the value added to a customer. Period.
LordOfWar
Politicker
+6
Director
It seems lots of companies in my industry (government/LE/defence) don't provide commission. I know lots of reps who do what I do, or similar to what I used to do in previous jobs and make no commission.ย Their base is comfortable but not great.ย 

The base I would need to forgo commission would be much higher than anyone would pay, and I'd never rest easy knowing I'd be the first on the chopping block after a bad quarter or year.ย 

It might work to snatch a rep from somewhere, but in the end you're going to have to drive up base pay to retain or bring in the best talent. A basic commission plan is easy for a company to put in place and costs nothing if the rep sucks, so I don't know why it is so popular in my industry.

I guess when it's a cool-seeming job the owners think they can just hire any ex-cop/military/industry guy, but not all can do what we do and do it well.
PhlipOut
Politicker
+6
Account Executive
Id be interested to know what kind of talent this system attracts. More junior reps that would love that save 6figs or maybe too many "middle of the road " sales people? Or people that are tired of the constant grind & chase?
ย I mean I've def had moments where I'd take a guaranteed 80% of my ote.. and others when I'm killing it and that would be a loss.

I know monday.com di it. Where I am I heard 160k usd , but I'm sure everyone gets paid different based on seniority, segment etc.


Hard to care that much about your forecast if it's no money for you tho..
alecabral
Arsonist
+7
Director - Digital Sales Transformation
Recognition and ovation usually achieve more than commission...but honestly, I can't really seem to imagine sales people not making any money on commissions being happy. I wonder what their employees think.
HappyGilmore
Politicker
+7
Account Executive
A non-commissioned sales role is not for me. Part of the fun for me at least is getting commission after a win, so losing that would motivate me slightly less (even with a high "base"). That being said, this kind of model can be successful for those who are more non-traditional salespeople.ย 
tonysoprano
Opinionated
+5
AE
at the end of 2020 i was looking for a new gig and interviewed for an AE role that didn't pay commission. I heard them out and all power to them since it sounds like they're growing but i can't imagine finding motivation if i'm not seeing immediate benefits from closing business. Their's was all about culture and being passionate about getting the product in the market, but the base was no higher than other bases that included commission, which was even weirder. idk how they can fill a team of hungry AEs paying them less than 100K base without commission
WolfOfTheWest
Territory manager
Money over everything
kla8ter
CDO
How would success be defined? The goal posts would constantly move. It wouldnโ€™t be an environment I would not want to work in.
Stratifyz
Opinionated
+9
Business Development Rep
Itโ€™s a good debateโ€ฆ look at other roles that are expected to perform with no commission. I kind of like the higher base pay with no comp. Either youโ€™re gonna sell or youโ€™re not - those people will weed out.
NoSuperhero
Politicker
+6
BDR
Unless the base pay is EXTREMELY satisfying, I'd say HELL NO.
Slobonmyknob
Catalyst
+3
Sales
I think to find sales representatives that would accept a non-commission role and stay motivated would be difficult, but possible. However, I think at some point, these reps would begin to question how much they would be making if they were working on a commission basis- "If this company can pay me a $200K base, how much are THEY making off of me per year?" kind of thoughts is what I would see happening. I think the core of a lot of great sales people is the motivation to earn more- with a set base salary, that is lost.ย 
AlexT
Opinionated
+2
Account Executive
I would much rather have uncapped commissions even if I ended up earning less.ย ย 

No base can cover for the damages my mindset will suffer.ย 
RollOverBeethoven
Contributor
+2
Commercial Director
The book drive (the surprising truth about what motivates us) has a really good arguement for motivating commercial teams without financial incentives.ย 
swissarmysalesknife
Old School Bravo
Senior Sales Manager
@salesnerdย Worked at a company as their first Strat hire for Sales. It was non commission but a pretty high base (200k) so was looking towards it as a quick pop to get to a Director title to take over the growth of that line of business. Heard a lot of other peers discussing this as a growing trend in certain pockets of sales so thought I would explore it myself to validate whether it would have legs long term.

I didn't make it past 10 months. While the focus was driving culture towards better customer experiences, the pressure removed from having to hit a number meant that attainment was low and thus targets were constantly missed. They basically hired a bunch of people that just wanted to be friends and had little to no true motivation to push the business forward.ย 

Left the business and they eventually started moving towards more of a commission based model. Personally don't think it would work long term as you are in theory not aligned with the needs of the business. Sales is tough so hiring people that aren't ready for the challenge it presents means you're hiring people that aren't vested in the success of those efforts. It's like hiring engineers that don't know how to code, but telling them "we don't care when you ship product just do your best to get it out".
hafasham
Good Citizen
BDR
The company I work for switched to non-commission sales comp at the beginning of 2020 and its worked out pretty well for us.ย 

The idea behind it was to more fairly compensate our SEs (who we couldn't close a single deal without) but it had the added benefits of raising avg. order size & customer LTV, while reducing customer churn.ย 

Since the switch, our sales org has had 0 turnover, and I haven't seen any other roles in our space offering an OTE that matches our new base comp. It can work, but it's very much industry and company-specific
thegrinch
Politicker
+5
SDR
Damn, what's the name of this company? I might apply lol
No
Noneyabusiness
Good Citizen
District Sales Manager
I commend any sales rep that wants to work with no commission. I donโ€™t think I could ever do that myself though. Most sales people are A type personality and very competitive. Best way to show the scoreboard is through commission. Iโ€™ve always liked that I made more than my boss did and without a good back end Iโ€™m not sure Iโ€™d want to do the job.ย 
Prunetracey
Contributor
+1
VP Growth
After reading your edit, I feel like paying a large base with no commission is a largely inefficient way to grow a business....
SaaSam
Opinionated
+4
Account Executive
With the high base it makes sense. I would imagine they would have to have a pretty stellar culture as well to make that work. Are there any additional incentives like bonuses and such? How do they weed out anyone looking to coast?
babbler
VP, Digital Culture
It's hard to say that it can't ever be possible. I could see a situation where the whole company is salary based and the salaries are high enough to make the team feel motivated. However, for me and my sales teams a strong base salary with commission not only motivates the team to want to sell but also helps me to understand where I can continue to help them grow.ย 
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