Mor(e)on policies

Evergreen

What's your thoughts on sales incentives from vendors policies. Vendors are offering trips, HDTVs, cars and other "stuff" to our sales people that sell a set amount.

My concern is that I don't want incentives unduley influencing sales without regard to the value of the product (ie.: selling brand A vs brand B becuase brand A vendor is offering a trip, even though brand A is inferior and costs more).

Whirlwind

Well, I think....oops, I just realized I must recuse myself from this discussion since I have been on free trips to both Australia and England within the past two years thanks to sales incentives. I might not be objective. x:-)

Evergreen

So, did it help you make your company more successful? Or did it make you an "evil and greedy" sales person?

Whirlwind

Neither. I was the lucky beneficiary of trips-for-two awarded to my significant other.

But I think you've raised an interesting question which deserves a considered response. This is a possible conflict of interest issue. If you haven't seen them, there have been a variety of company ethics-related posts on the Forum, and you could do a search for those. I believe there might even be sample ethics policies in the HR Documents 911 area.

I'm in the public sector, where we're not allowed to accept much more than a coffee mug or a gimme cap. But from what I know about sales, incentives in the form of trips, electronics, etc. are extremely common. Maybe someone else has other ideas and will post them, but I don't see how you can opt out or disallow your sales force from accepting these incentives without demoralizing them. Nevertheless, you can still have the standard and the expectation that your sales personnel will not let incentives influence them to push an inappropriate product on a customer, and you can communicate that you will hold sales staff accountable for that standard.

To address the question in a more philosophical way, isn't the "raison d'etre" of sales to sell things as a primary goal with "whether-they-need-it-or-not" a distant second? And here's another devil's x}> advocate question: Is this is an HR issues or a sales management issue?

hhaynal

[font size="1" color="#FF0000"]LAST EDITED ON 12-16-04 AT 08:53AM (CST)[/font][br][br]Our company has a strict code of conduct that each employee must sign off to at the end of the year. The guidelines state that an employee cannot accept a vendor gift in excess of $100. As for trips, any trip that requires overnight travel is prohibited. An employee can accept an invitation to attend an event such as a sporting event, theatre, etc. as the guest of a vendor. If out-of-town travel is required to attend the event, the employee must pay their own travel expenses or see if the company will pick up under their own budget.

The purpose of the code, among other things, is to thwart favoritism to certain vendors through excessive incentives.

marc

Bribes and kickbacks are illegal. If you were in a purchasing department and did this, you could go to jail. Packaging this as sales incentives probably gets around those rules, but why would the prize go to the sales person? Perhaps this should be a company asset to be distributed as management sees fit, not as a coercion from a third party to upset your normal sales process.

You must be in a very different business to have this practice be normal. There must be quite a bit more to the story - but otherwise, I don't like the process - it just doesn't feel right.

Evergreen

Our business sells services and software solutions. The sw vendor is offering a trip for the regions highest sellers.

We've never qualified before, but we may soon. Personally, I don't like it. But it is demoralizing if the owner (who is me) gets the trips or they are not accecpted from the vendor. I understand how it can be a great sales tool, but all tools can be destructive as well as constructive (try a sledge hammer).

It was brought up when I interviewed a potential candidate that left a former firm in part because the owner took all the sales incentives for his own.

I was just looking for other firms to weigh in on this issue, after all, I'm a small business, just trying to make payrolls.

Thanks.

HRinFL

My company has a no conflict/vendor gift policy that prohibits accepting personal gifts from vendors. If a vendor wants to give a gift, or if the company reaches a sales goal, etc. for an incentive, all gifts go to one department, who determines if the gift can be accepted. Instead of keeping gifts for high level management, these are redistributed to associates during United Way campaigns as raffle prizes, given to associates during benefits meetings for answering questions correctly, etc. This way, everyone has the potential to enjoy the benefit. It has been received very positively. In my opinion, the ees get the benefit and it evens the odds. There is always one area where the sales are constantly higher than others. I know I would be ticked if the same person had all the fun!

Don D

Aside from the conversation, I'm just noticing the very clever title of this thread. I guess I'm slow, but just realized it refers to MORON policies and More On Policies. To Marc's point, I'll counter that there is absolutely nothing illegal about the very prevalent practice of companies and corporations giving away expensive gifts/prizes/rewards to those who successfully hawk their products, as well as giving them to those who purchase their products.

Evergreen

Thanks Don, always nice to get noticed. I've always disliked polices (as an employee). Now that I am a business owner, I feel like I'm always creating a new policy for those mor(e)on's that try to weasel or abuse the business. Kinda falles under the "necessary evil" catagory!

I appreciate the input on this subject. I think that I will let those that work hard to win the prices, win them. That is, until it's abused - ha!

Merry Christmas to all! opps, hope I didn't offend anyone!