Manager motivation | soft and hard salary, bonuses

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Sales manager motivation is a system of material and non-material incentives aimed at improving employee performance, increasing sales and achieving key indicators. It is based on three main elements: fixed salary , soft salary and bonuses , each of which plays its role in the overall motivation system.

The manager's motivation should consist of three components. This will guarantee that there will be no leveling: those who work better will receive more.

Basic elements of motivation
Fixed salary (fixed part of salary):
This is a guaranteed income that an employee receives regardless sweden whatsapp list of the results of his work.
Provides basic financial stability.
Used to cover the manager’s mandatory expenses and to motivate him to perform routine tasks (working with reports, complying with standards, etc.).
Example: A sales manager receives a fixed salary of 40,000 rubles per month.

Soft salary (conditionally variable part):
This is an additional fixed portion of the salary, the payment of which depends on the achievement of minimum KPIs (for example, the number of calls, meetings or new clients).
Stimulates the achievement of basic goals.
Often used in systems where it is important to maintain employee activity at a certain level.
Example: A manager receives an additional 10,000 rubles if he makes at least 100 calls and holds 20 meetings in a month.

Bonuses (variable part):
Depend solely on the results of the manager's work.
They can be percentage-based (from the sales amount) or fixed (for achieving certain goals).
They create a strong motivation in employees to increase sales volumes.
Example:

5% of monthly sales volume.
20,000 rubles for attracting a new major client.
The first part is a fixed salary. It should be enough only to satisfy the most basic needs: to eat modestly and pay for an apartment with a roommate.

The second part is a soft salary, which is calculated taking into account 100% fulfillment of performance indicators .

These KPIs must be announced in advance, thus the principle of transparency in the motivation system will work. For example, the number of calls, meetings, order in the CRM, etc., but no more than 4-5 indicators can be set as KPIs. Over time, they should change to facilitate the implementation of a particular task.

The next part of motivation is bonuses. They should be tied to the fulfillment of the plan . Moreover, it is necessary to set a clear bar, the achievement of which is mandatory for receiving this part of the salary. As a rule, this is 80% of the plan.

To motivate sales to increase, the bonus percentage should be increased. That is, fulfilling the plan by 100% should be rewarded more than 80%, and receiving revenue at the level of 120% of the plan - more than 100%.

Why is it important to combine all three elements?
A fixed salary guarantees stability and allows you to focus on work.
A soft salary encourages you to perform basic duties.
Bonuses stimulate the desire for results and additional income.
If you exclude one of the elements, motivation may decrease. For example, the absence of bonuses will make the result less important, and the absence of a fixed part will lead to fear of losing income.

Tips for implementing an effective motivation system:
Transparency: Employees must clearly understand what they are being paid for and how much.
Flexibility: The incentive system must adapt to changes in business and market conditions.
Realistic: The conditions for receiving bonuses or soft salary should be achievable, but require effort.
Incentive Combination: Include non-material rewards (recognition, training, development).
Example of motivation calculation:
Conditions:

Fixed salary: 50,000 rubles.
Soft salary: 10,000 rubles for achieving KPI (100 calls, 20 meetings).
Bonus: 5% of sales volume.
Manager's work results for the month:

Sales: 1,000,000 rubles.
KPIs have been met.
Total income:

Fixed salary: 50,000 rubles.
Soft salary: 10,000 rubles.
Bonus: 50,000 rubles (5% of 1,000,000).
Total salary: 110,000 rubles.

A motivation system that includes a fixed salary, a soft salary, and bonuses provides a balance between stability and the desire for high results. This makes managers more interested in achieving the company's goals and increasing profits