Commission agreement for non-sales employees

[Chewbacca 7829]

My partners and I are considering paying commissions to non-sales employees for bringing in business.  We are currently a small company and don't want the overhead of a full time BD person but some of our employees (and prospective employees) have contacts that could get us work to grow the company.  The other BD folks are me and my 2 partners.  Obviously we do not get commissions.  We have floated the idea to a couple employees and they are very receptive.  The commissions would be in addition to their regular salaries.

 

Anyone have experience with this?  I don't really see a downside to it but might be missing something.  I think this could be a real win-win for the company and our employees.

[Reagan1k 3042]

I pay commissions /bonuses on a quarterly basis to a couple of my salaried guys for income generated outside of their normal roles.

Easy to do...just make sure you put it all down on paper so there is no confusion as to their primary roles and their extra incentives.  

You don't want them slacking off on the roles for which they earn a salary while they try to expand their income through commissions.

My guys basically do their "marketing" after hours / on their own time.  I'm basically rewarding them for going above and beyond.

Performance reviews might need to more frequent to make sure there is no role-creep away from their primary purpose.

Go for it.

[T’Boo Ted Marshall 2779]

Every seat in your organization is commissionable but with varying degrees.

[52-80 19377]

I'll share with you my experience for 2% equity per hour

[Chewbacca 7829]

I'll share with you my experience for 2% equity per hour

Do you have a newsletter i can subscribe to?

[Judge Roybeanbag 11860]

If you are hiring in the future you might also consider offering referral bonuses to save on recruiting costs.  

[Chewbacca 7829]

On 9/14/2018 at 9:11 PM, Reagan1k said:

I pay commissions /bonuses on a quarterly basis to a couple of my salaried guys for income generated outside of their normal roles.

Easy to do...just make sure you put it all down on paper so there is no confusion as to their primary roles and their extra incentives.  

You don't want them slacking off on the roles for which they earn a salary while they try to expand their income through commissions.

My guys basically do their "marketing" after hours / on their own time.  I'm basically rewarding them for going above and beyond.

Performance reviews might need to more frequent to make sure there is no role-creep away from their primary purpose.

Go for it.

What kind of agreement do you have them sign?  I assume some sort of non-solicitation/non-compete related to the clients they bring in?

[Reagan1k 3042]

2 hours ago, Chewbacca said:

What kind of agreement do you have them sign?  I assume some sort of non-solicitation/non-compete related to the clients they bring in?

Agreement for this is not related to general terms of employment.  It's related to commission compensation only.....

Outlines normal duties for salary and expected job performance and then spells out the terms under which new business being brought in will be compensated and for how long, etc.

Just shows how they get paid and under what terms.

[jimmyjazz 47127]

I could never get my last company to go for it.  I floated dozens of potential sales up to VP Sales (I was not in sales) based on cold calls or other angles I pursued on behalf of the company, and there was zero chance they were ever going to give me a dime.  Pissed me off, but in the end, all deals were good for the company so I did it (as did most of the engineering team).

Moral of the story:  NOT offering this kind of incentive can create discord.  I'd do it.  The biggest concern would be having people shirk their primary responsibilities to chase sales. 

[Chewbacca 7829]

37 minutes ago, Reagan1k said:

Agreement for this is not related to general terms of employment.  It's related to commission compensation only.....

Outlines normal duties for salary and expected job performance and then spells out the terms under which new business being brought in will be compensated and for how long, etc.

Just shows how they get paid and under what terms.

Right, that's what I was thinking.  That a separate agreement would be signed for commissions and that we don't want employees taking clients with them when they leave.  I'm not talking about a non-compete to keep them from working, just a non-solicitation for clients they bring in and get paid on.  

[Chewbacca 7829]

26 minutes ago, jimmyjazz said:

I could never get my last company to go for it.  I floated dozens of potential sales up to VP Sales (I was not in sales) based on cold calls or other angles I pursued on behalf of the company, and there was zero chance they were ever going to give me a dime.  Pissed me off, but in the end, all deals were good for the company so I did it (as did most of the engineering team).

Moral of the story:  NOT offering this kind of incentive can create discord.  I'd do it.  The biggest concern would be having people shirk their primary responsibilities to chase sales. 

This is why I want to do it.  Not only can our employees help us grow, they will have a financial incentive to do so.  It aligns their interests with ours (moreso than if we don't do it) and I want to be somewhere people want to work.

[Chewbacca 7829]

On 9/15/2018 at 1:04 PM, Judge Roybeanbag said:

If you are hiring in the future you might also consider offering referral bonuses to save on recruiting costs.  

We plan on doing this, too.

[Reagan1k 3042]

4 minutes ago, Chewbacca said:

Right, that's what I was thinking.  That a separate agreement would be signed for commissions and that we don't want employees taking clients with them when they leave.  I'm not talking about a non-compete to keep them from working, just a non-solicitation for clients they bring in and get paid on.  

Gotcha - My firm is set up in such a way that this class of employee  is of no risk to me if they leave and therefore I don't have non-competes for them.  They aren't in a sales role at all in their normal course of activity / skill-set and therefore are not predisposed to look for a way to set up their own shop. 

Could they - I guess, but since I do this on a case by case basis, I have a feel for the pulse of the employee and create this incentive in benign situations.

Basically I'm taking a person who normally has blinders on with regard to prospecting, and removing those blinders from them.  The nature of our business is such that they couldn't just hang a shingle on a whim and impact me.

Anything is possible but that's the least of my worries for this group.  I'm more focused on keeping them from being poached by employers in other industries or market segments.