How to push back if a company isn't paying your full OTENov 30, 2022
Back by (un)popular demand. The end of month special.
Over the past few months, I’ve had multiple mentees ask me:
- How to push back if a company isn’t paying your full OTE;
- How to tell if a sales team is a good one.
Let's talk FauxTE. The colloquial semi-acronym for Faux Target Earnings, or to put it bluntly, On Target Earnings that aren’t real. Some people call them Off Target Earnings.
It’s come up a lot recently when candidates haven’t been paid their commission in full, haven’t been granted their stock or haven’t received their end of year bonuses.
In response, I have listed two examples that you as the reader may resonate with. Both are fictional, although Scenario 2 is heavily inspired by a friend of mine on Linkedin.
It’s the end of the month/quarter and you’ve done it.
You’ve smashed your numbers out of the park.
Absolutely obliterated them.
You’ve just snuck in a $1.2m enterprise deal to make it even sweeter.
Then you get that invite.
Your boss brings you into their office to tell you that the $150,000 commission check you’re expecting is actually not going to be that…
You have four choices:
- Make a scene?
- Quit on the spot?
- Lick your wounds and hang out until you look for a new job?
- Enforce your employment contract?
This scenario is really tough.
Please keep in mind, I’m no lawyer, so please consult a legal professional before you take advice from me. Although, here are just some examples:
- Firstly, you could check your employment contract and see if there’s a clause under commission that talks about Discretionary Commission/Bonus. If there is, you’re probably out of luck. If not, you could probably take it back to them and discuss it further.
- Secondly, there is a strong chance that you have the commission structure in writing. Dig that up, it’s good to have in your back pocket if this happens. Don’t have one in writing, try the next point? If not? We address this later in the newsletter.
- Thirdly, if you ever had a verbal conversation about a commission structure, hopefully you followed it up with an email summary to the hiring manager you had the conversation with. If not, it’s not the end of the world, but it’s something to keep in mind for future scenarios.
- Lastly, it’s best to go into these conversations with as much data as possible, since they have probably already come to terms with the fact you’ll likely quit if you don’t get paid.
You’ve been headhunted for a job.
The recruiter has told you that everyone at the business is at 200% of their quota.
A ridiculous statement, but you’ve bought into the vision and interview.
It sounds like a dream job, so you ignore your gut and go head first into the process.
When you speak to the hiring manager, they admit that 200% of quota is in fact BS, but it’s more like 125%.
That’s all you need to hear, you don’t dig into it any more, since you’re excited.
“What’s the worst that could happen?” You ask yourself.
Then comes day one, you look at the numbers, not a single person is at quota and every lead in the country is exhausted. Your heart sinks…
Now, before you get the pitchforks out and start calling out your Sales Leaders, please keep some things in mind. Running a sales team is really really hard. I've done it for years at multiple companies. It can be incredibly tough. Rewarding, but tough.
But, no leader should ever be dishonest in the hiring process. And if they are, run.
After speaking to multiple experts on the matter, I have compiled the following checklist to help you, which I call the Is It Too Good To Be True Checklist:
Questions for hiring manager:
- What’s the average quota attainment among your sales team?
- How many deals are your sales team doing a month?
- What’s the average size of the deal?
- What’s the attrition of your sales team?
- How many sales members have left in the last 12 months?
- What support do you give your sales staff that are not hitting their targets?
- Do you coach and train your staff?
- Can you give me an example of that training?
Items to be conscious of:
- If your contract isn’t clear, ask for clarification before signing.
- If the contract and the conversations that they’ve promised don’t add up, it’s not a good sign.
- If there’s a clause that says, “commission to be reviewed at any time without warning”, it’s not a good sign.
- If your stock options are so confusing that you require a lawyer to look over it, it’s probably not a good sign.
- If they say, “don’t worry, legal just needs to look at it, but it’ll be ready for you in your package for your first day,” it’s not a good sign.
- If there are any handshake deals that feel too good to be true. They probably are.
If you’re at the offer stage, ask the above questions to the hiring manager and make sure you keep the items to be conscious of in the back of your mind.
It’s probably best to not interrogate them with these questions, but instead, ask them in a fluid manner throughout the hiring process and make sure they are documented in writing.
As always, if you’re in the middle of either of these conversations, feel free to hit me up and we can talk about them together.
I’m all about giving back to the community that has given me so much.
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