Found August 30, 2009 on
Another Cubs Blog:
Here’s a somewhat pretend scenario based on a true story. Let’s say you’re running a company, and hire a guy with a 3-year contract worth $300,000. You give him a $40,000 signing bonus, will pay him $50,000 in his first year, $90,000 in his second year, and $120,000 in his third year. Let’s furthermore say his occupation is such that his value can be measured in a very real and important number: dollars ($). A salesman would be a great example of this. Finally, let’s say the guy you hired – let’s call him Mitch… Brinks – had incredible sales elsewhere but some of his “reference” letters mentioned some attitude problems. So here’s the game: it’s currently nearing the end of year 1 and Mitch just got into a bit of a yelling match with someone, so you figure now is a good time to review the return on your investment.
When you look at the numbers, you see Mitch had a rough start. He had moved from the West Coast, and didn’t adjust to East Coast time (and your company’s early-to-rise schedule) for a while. His luck was pretty bad. There were quite a few deals he made that due to some bad luck, Mitch didn’t seem to close. So his sales were down. Waaaay down. To make matters worse, he also rubbed some customers the wrong way. (Fortunately they were the type to write a nasty letter but show up again tomorrow.) Finally, the whole company seemed to be in a rut. Not only were Mitch’s numbers down, but one of your other top salesman – Adolphus Scranton – has been sick all year and has seemingly cost the company money. Another salesperson, Alex Randley, was out sick for 3 months. The company has had a horrible year, and Mitch had been really, really disappointing.
But then you also noticed something else… Around halfway through the year, something clicked for Mr. Brinks and he started getting the sales you expected. His luck turned around quite a bit, and most of his deals were closing. His attitude still didn’t agree with people at times… but Mitch has a damn good salesman the past few months. In fact, he’s been such a good salesman that it’s only October and Mitch has already earned his salary for the year! In fact, he’s earned enough – $65,000 – to be worth his yearly salary ($50,000) plus the pro-rated portion of his signing bonus ($13,334)… and he’s still got 2 months to go!! You start patting yourself on the back for hiring this guy, because you realize that you’re probably underpaying him for his sales performance this year. You’re also fairly confident that he can live up to the escalating portions of his contract because the past few months have been more in line with his career performance levels than the first half of the year were. This belief is reinforced by your knowledge that other employees have also had slow starts with the company, only to rebound late in the first year of their time with the firm.
So you look at all this, and are getting some unpaid advice from some blowhard “friends” of yours that don’t know the first thing about sales but know a LOT about making their opinions heard. They tell you to cut bait with Mr. Brinks and fire him immediately because he hasn’t gotten along with everyone. You start to consider their opinion, until you remember that they’re blowhards and what’s worse they’re professional rabble-rousers that profit from the attention their loud (albeit ill-advised) opinions generate. (This action also has the unfortunate side effect of getting the neighbors to taunt Mr. Brinks whenever he tries to make a sale.) Given all this, do you take their advice, and fire your solid salesman?
Of course you don’t.
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