This is an anonymous post from an Elpha member.

Commission vs. Bonuses?

anonymous·Jan 06, 2020

Posted in:Sales

Hi sales crew! How would you define the difference btw commission and bonuses? Here's the context around my question:I'm currently a sales team of 1 at a 4 person startup. When I was hired, I was told that my base would be $60k and my OTE would be $80k. The major challenge is that the product was much less developed than I thought, so I spent much of my first months on the job developing the product structure and sales collateral and testing for what target market might be our product-market fit. (All I was told was to "go after big companies.") My specific questions are these: 1. In my contract, my commission is written as a "bonus" to be paid only at the end of the year. I only earn it if I'm still with the employer at the end of the year. Is this customary at all? My last sales job paid commission monthly. (It feels wrong to withhold that big a chunk of my salary for the entire year, especially when I said my minimum was $70k when I was hired.) 2. I'd like to advocate for my commission to be an actual commission and to be paid out quarterly. Do any of you have any resources that might support my argument here? 3. There was no KPI or comp plan in place (and because there was no real product, it was almost impossible to create adequate KPIs). I've started to put one together (with little to no help or input from my founder). I was curious if anyone here was familiar with startup sales comp plans and might be willing to take a look at mine to make sure I'm not totally selling myself short? 4. Finally, because there was no comp plan in place for the past two quarters (I've been with the company for 6 months), I'd like to advocate to be paid my entire commission. Any tips or advice with regard to that? A final vent: I'm frustrated because I was told that the "bonus" would be paid at the end of the year, and noticing I hadn't received it today, was told by my founder that "he hasn't gotten around to it yet and would probably pay it out in the next few weeks." Is this normal? Thanks Elphas!

AmeliaJael·Jan 07, 2020

I would reach out to the author of this book via LinkedIn, she seems pretty approachablehttps://www.bridgegroupinc.com/sales-development-playbookAlso, these guys have helped set up sales programs/processes and may have insight. let him know Amelia sent youhttps://www.linkedin.com/in/brendanabarrett/https://www.linkedin.com/in/donaldckelly/

Farren·Jan 07, 2020

Hi @AmeliaJaelI believe there is something more alarming going on here. Please see my reply.

anonymous·Jan 09, 2020

Thanks so much I'll check out this resource and will look into reaching out to those connections. Thanks!

Farren·Jan 07, 2020

You need a lawyer right away. This is exploitation and I’ll tell you why.You provide a certain value to the company in the form of employment. Your company pays for that value. Simple as that.You close deals, you get paid on them. That’s it.The ONLY reason to express a commission as a bonus is to make sure you don’t have to pay people for the work they did. And as you said, your CEO hasn’t “gotten around to it yet." That's not a mistake, it's intentional. They have no plans to pay you. What he is doing is completely illegal. You cannot turn commission into a bonus, it doesn't work that way.You are being scammed.You need to consult with an employment lawyer. If you need a free resource, reach out to the department of labor. Your CEO is robbing you for free labor and he knows exactly what he is doing. He's banking on you being too trusting to put your foot down.Please reach out to me directly if I can be of further help. You can email me at [email protected]. But no matter what, please, please, please get yourself a lawyer.

anonymous·Jan 09, 2020

Thanks for this! I really appreciate the concern. I have a scheduled conversation with him for tomorrow. Depending on how it goes I'll see what action I need to take. The challenge here is that I haven't actually closed any deals. He knew that going in (since we were fully changing our product and target market when I started) and said my OTE would be based on KPIs, not sales. My guess is that's why he did it as a bonus. However, he hired me without having made any sales himself. I was honestly just naive and feel dumb for accepting the offer in the first place (let alone spending the last 6 months on it). Not sure what recourse I have given neither of us have closed any deals.

AmeliaJael·Jan 09, 2020

If your Founder is open to guidance in figuring any of this out, I am happy to make introductions to people who may be willing to mentor or consult in some capacity.