I am currently in the process of developing a suggestion for a new salary system for my directs and their directs. Any input on the below would be greatly appreciated!
[i]I realize this is going to be a very long post. I'll try to keep it as short and accessible as possible and hope that someone has the stamina to skim it through and give me some input. I am very junior in my role and have so far failed to identify any solid resources on this subject.[/i]
[b]Things I am looking to adress:[/b]
Inconsistency and inaccessabilty in the current system
Employee retention
Employee motivation
Overall resultsorientation
Reduce salarycost of low performers
[b]
Organizational background[/b]
I work as a manager for a team of salespeople/recruiters. My direct reports consists of a number of teamleaders in charge of teams of 4-12 recruiters spread across the country. We work in the streets of sweden with aquiring direct debit donors for a major NGO.
[b]Current system:[/b]
Salary consists of a baseline depending on how long a recruiter has worked for us. As the time worked for us increases their hourly pay increases regardless of results. (this happens three times. After 3 months, 6 months and 9 months) To this we add a bonus/commission based on donors recruited/hour(this is /hour spent on the street. Meeting hours, travelling hours etc does NOT affect salary). Meaning 0,5 donors/hour equals one payrate, 0,6 donoes a higher, 0,7 donors another and so forth
Teamleaders earn a somewhat higher salary, same base regardless of time worked for us with a possibilty of a significantly higher hourly rate if exceeding budget severly.
[b]Problems with the current system:[/b]
1. The system is very hard for most people to get their head around. Most of our recruiters don't think about it on the street or when calculating next months salary. The bonus is a welcomed surprise. Thus it fails to be a motivator whilst recruiting.
2. Low performers that aren't dealt with swiftly are quite costly in the long run, despite not delivering.
3. Teamleaders earn less than medium and high performers. In some cases this is of course the way it should be, in other cases (with experienced high performing teamleaders) quite the opposite.
4. If you as a recruiter perform extremely good in the beginning of the week, it might be profitable to stay home at the end of the week to not lower your average.
5. Reducing hours spent on streets means increasing overall profitabilty since the average will be calculated against less recruiting hours.
6. There is a limited careerpath for a recruiter. Basically the only way to go is =>teamleader=>manager=>fundraising director with no steps in between, or try to move to a completely different department within the organization, a position that is likely to require a completely different skillset.
[b]New system?[/b]
Base salary remains the same for [u] all [/u] recruiters. Bonus is a set number/new donor recruited. As the recruiters time (number of supporters aquired? Something else?) increases he/she moves up the organizational ladder, from for example junior recruiter to recruiter to senior recruiter (any suggestions here is very welcome) and with that increases the bonusrate PER SUPPORTER.
[b]Pros with suggested system[/b]:
This would make the payrate more visibly performance related, increase the financial incentive to spend time on the street rectruiting.
It would also give us the benefit of making an alternative careerladder for those who are not suitable to go into management. We would be able to hold special conferences and trainings for recruiters that has been with us for a while, give them special business cards and in other ways show them that they are special to us.
Putting the payment increase on the bonus instead of the baseline would also further increase financial incentives + reduce the risk of overpaying low performers that has been with us for a longer period of time.
[b]New teamleader salary system[/b]
Is a significantly harder one since different team leaders have teams of different sizes and operate in cities with very different conditions. I'm still looking for a good way to adress this, any input would of course be more than welcome.
[b]Thanks[/b]
If you read this far, I am a great admirer of your intellectual stamina ;)
What are your thoughts? Is my reasoning valid? I might be way off since I have no experience whatsoever in developing systems like this. Any advice/comments/input is greatly appreciated
thanks for your time and thoughts
/Rasmus[i][/i]

New salary system for salespeople
Hum.. obviously I didn't do a very good job creating an appealing subject =/ Any advice on how to be a better poster? Am I asking for too much? Writing way too much? Boring? Unclear?
thanks
/Rasmus
New salary system for salespeople
Not knowing too much about your organization, my comments may be off base, but here it goes:
- Why have all recruiters on the same base? Are they all equal in skill and responsibilities? One way of handling it would be to create different levels (as you mentioned towards the end of your post) like Jr. Recruiter, Sr. Recruiter, etc. The base increases as they move up the ladder.
- Bonus should probably be tied with goals, like number of new donors recruited. The best would be to have a target for each rep and if they exceed the target, they get the bonus. Structuring the bonus should be based on realistic goals and how do you want to motivate them. Other ways to structure the bonus might be related to not only recruiting new donors but in sharing experiences with other recruiters or participating in training, etc. You will have to choose the best way to motivate and how to use the bonus. Note that "bonus" may not necessarily be money, you could have something like a two days vacation with all expenses paid for the best recruiter of the quarter, etc.
Do you have repeat donors? Meaning the same donor giving year after year? Maybe another way to structure bonus is based on donor retention... if the recruiter is able to get donors come back for another year of giving, is an extra bonus.
A key aspect I think is also to understand the sales process. What does it take to recruit a donor? How many visits? How many phone calls? break it down into numbers (you may have to begin with some assumptions) and see how it works out... those numbers when shared with the recruiters could also serve to motivate and give them a better idea of what they need to do to achieve their goals.
Hope this helps!
Daniel
New salary system for salespeople
Great post. Thank you Daniel!
Bonus based on retention of supporters as well as non monetary bonuses are definatly ideas I'll bring into the thinking process.
competition
setting targets I take into account that:
cooperation always beats competition, in the end ...