Companies are always seeking new innovative ways to increase sales. In order to increase sales they must have good people pushing their product/services. For years sales quotas have been used to measure the success of sales people. They want to ensure that their employees are performing their jobs. Sales quotas do more harm than good because they create unnecessary competition amongst employees.
When companies implement sales quotas they can have bath positive and negative affects on employees’ performance. According to Sue Greco of Inc. Magazine setting quotas is a challenge because if a goal is set too low they pay out more money; if goals are to high sales people don’t make money and eventually leave the company. Sales quotas may motivate some employees to work harder while it may cause some to dishonest things.
I once worked for a cell phone company that required its sales associates to sell at least 40 phones a month. I felt that this quota was highly excessive considering the fact that we had competitors literally on both sides of our front door. If those quotas were not met you received a verbal warning. The second time the sales quota was not met you would receive a written warning. If you did not meet your sales quota for the third consecutive month you would be terminated. Most employees began to feel like the sales quotas were unrealistic and highly unattainable. This caused many employees to reach a point of desperation. They literally would fight each other over sales. Instead of working together they began to work against each other. Employees started fudging numbers just to get closer to reaching their sales quotas. There were even some cases of employees making up fictitious accounts to appear that they were successfully meeting their quotas.
Sales quotas can make employees feel like there are backed into a corner. Sales quotas should only be used if employees are working soley on commission. This way sales people know what is expected of them without any surprises.
Sales quotas place lots of pressure on employees. It is a bad feeling to think that not making your sales quota can make a difference between working and being in the unemployment line. When it comes to making sales quotas there is no room for compromise because you either do or you don’t. Sales quotas should be set with some form of reason in mind. If this cannot be done they should be eliminated completely. This will reduce the unnecessary comradely amongst employees.