Adam linked to a thoughtful article written by Fog Creek Software that described its rationale for switching to non-commission-based comp plans for its sales team. The article spurred some interesting thoughts as well as a burst of tweets from some developer friends and colleagues - presumably because the article reflects a developer perspective.
So I thought I would jot down some notes for posterity.
In short - different jobs require different skills that require different incentives. Selling and coding are incredibly different tasks and thus shouldn't be comped the same.
For our purpose at Argyle, sales reps execute a process over and over. Unit-based incentives work incredibly well for these tasks. The best sales people are coin operated - if you create a properly aligned commission plan, they'll do exactly the things that earn them the most money...which are hopefully the things that create value for the company.
Software developers solve complex problems over time. Unit incentives are demotivating when tied to these tasks. Check out this great talk from Dan Pink about the surprising impact that incentives can have on motivation.
A commission-less sales comp plan doesn't take away any of the realties of the sales role. There is still a quota and intense pressure to hit it. Just without the upside for performance beyond quota.
When done well, sales commission compensation rocks. I loved getting it as a sales rep. And I LOVE paying it as a CEO. I'll write another post about how we've evolved our commission plan over time at Argyle.