How come it works for basically every other job on this planet? Developers aren't paid per feature implemented/bug fixed, and we still do those things, how come sales people are unable to do things for a fixed monthly salary?
You have to separate out 2 different ideas of the "theoretical idealized salesperson that works for fixed salary" -vs- "real-world salesperson that works for variable commissions".
The businesses that have attempted to pay fixed salaries for salespeople end up attracting incompetent salespeople who can't sell. They become a negative cost on the company's payroll because they can't bring in any revenue. In contrast, the high-performance salespeople (the "rainmakers") are attracted to the variable high-commission, because they know they have the hard-to-find skills to actually sell and bring in the money. If a salesperson has the skills to get a customer to sign a contract and pay money, they have the leverage to get a percentage of that.
Developers, db sysadmins, tech support staff, etc are not in situations to directly influence and shake the hand of a new potential customer and convince them to write a check.
A top salesman can make more than the CEO from commission. Many top salespeople have a zero base salary.
The pressure is pretty crazy, though. I’m not cut out for that kind of thing.
> Many top salespeople have a zero base salary.
Hmm, probably true in some places, but here (Spain) that wouldn't even be legal. When I worked in sales we had minimum wage + commission, but I'm sure the salary would be 0 if they were allowed to set it up like that.
Many jobs will start you with a base for a few months, while you build commissions, but they stop it, after a while.
They can also get fired at the drop of a hat. Not much job security.
Sales are easy to convert to incentives. Just take a cut of the sale. It’s not so easy to calculate value from other jobs.
In the United States having "zero base bay" is hypothetical. If a full-time employee had no commission payouts they'd be compensated minimum wage as necessary to comply with laws.
Sales jobs often come with a warm-up period with either a higher base salary or they get paid part of their commission target for a number of months regardless of how many sales they make.
It isn't that "sales people"[0] can't work for a fixed salary. The good ones just won't because they can find another employer that will pay commission, and they know they will make more with commission than without.
Employers will pay commission because that's how you attract the best sales people, and the best sales people are worth orders of magnitude more to their business than average sales people. Despite how much they earn, in general and compared to their average peers, the best sales people don't cost orders of magnitude more (5x is a more typical spread in tech sales.)
The advantage of 100% commission -- where it is legal -- is pretty obvious from the employer's view point. The company only pays for production. These sales people are commonly (but not always) independent contractors. The benefit for the sales person is a little less obvious, but, generally, they have more autonomy, a simpler comp plan without any caps, and earn more per dollar sold than they would on a base + commission plan.
0 - whether magic or not
Yes they can not. It is not high quality work but high quality results for sales guy. Developer work is complete once service deployed. It wouldn't be developer failure if user volume doesn't reach x thousands per day on their web service. It would definitely be salesman failure sales does not reach x dollars in certain duration.
Developer equivalent of sales would be to say "I have distributed x sales brochures and call x number of clients this month. My job is done."
Top salespeople generally won't work for a fixed salary because they want to make as much as they can, and the way they do that is by having as much of their compensation tied to personal performance as possible.
I personally think more engineers/developers should think the same way, but it's also much harder to directly tie job performance to compensation when contributing to a product.
But that's the same no matter if you work in sales, customer support or many other roles, a lot of people just care about the money with little regards to anything else, yet the sales department are the only ones who must have commission?
It's actually not the same for many roles. See the comments from people in this thread alone who scoff at the notion of maximizing compensation. I don't get it personally, but it's not an uncommon thought.
> yet the sales department are the only ones who must have commission?
I think there's a very high likelihood that a salesperson is primarily driven by compensation, and good salespeople will already be working in a commission-driven compensation model elsewhere.
Why would a top salesperson at Dell, HPE, Oracle, or wherever else a hardware salesperson comes from move to Oxide to take less money and completely decouple their compensation from their performance?
If a team of developers work together to fix a bug, how would you calculate the revenue value of the bug and how would you distribute that to the team that solved it? Technically the value of a bug is negative because it costs the company, so do you subtract that from the pay of the engineers he worked on it? If 5 people implement a feature that uses a library developed by 5 other people, which was built on the platform team's infrastructure, how do you divide up the commission? It doesn't work.
To get that kind of proportional payback in engineering you'd need very clear financial objectives for a project. I could see that happening in optimization scenarios where consultants are brought in and get paid for whatever they can trim from operational costs.
Sales professionals have a lot of different places they can sell things. The market-rate compensation for sales includes commissions. So to get the best sales people, you want something easy and exciting to sell with a good commission structure tied to the sales.
In sales it is uniquely easy to identify your contribution since it's literally measured in dollars coming in.
There's no way to quantify that for feature implemented/bug fixed, it would devolve into endless politics.
> how come sales people are unable to do things for a fixed monthly salary?
Sure they are able, but no good sales person is interested. Presumably you'd want to hire the good ones. You can certainly staff a mediocre sales team on a fixed salary, they just won't do much selling.
This logic about stops working as soon as you sell something that is not some immediately exchanged mass produced commoditized gadget. Sales people on commission have tons of incentive to saddle the company with demands and imaginary product features they can't actually deliver on and be long gone before the bill comes due.
