In a recent Harvard Business Review article, Scott Edinger, author of The Growth Leader: Strategies to Drive the Top and Lisa Earle McLeod, author of Selling with Noble Purpose, challenge one of the most entrenched beliefs in the sales industry: that salespeople are fundamentally “coin-operated.” They argue that the notion of salespeople being exclusively motivated by financial incentives is both outdated and harmful. While fair compensation remains important, this oversimplification of motivations not only undervalues sales professionals but can lead to counterproductive leadership practices that harm customer relationships.
The money motivation myth
Research from Michigan State's Dr. Valerie Good reveals a surprising truth: salespeople who sell with a purpose beyond financial gain consistently outperform those focused solely on hitting targets and maximizing commissions.
These purpose-driven sellers demonstrate greater resilience and sustained effort over time compared to their financially-motivated counterparts. When sales orgs overly rely on financial incentives rather than actual strategic leadership, they can trigger a cascade of unintended consequences:
1. Complex compensation plans that backfire
Remember Goodhart's law: "When a measure becomes a target, it ceases to be a good measure." The Wells Fargo cross-selling scandal showed us this principle in action, where incentivizing account openings led employees to create millions of fraudulent accounts.
In the pursuit of optimizing compensation metrics, salespeople routinely engage in behaviors that undermine company strategy: pursuing the wrong accounts, recommending ill-fitting products, holding back deals to hit future quotas, or neglecting existing business in favor of new logos.
2. SPIFFs that sabotage customer trust
We've probably all experienced the salesperson who steers us toward a specific product regardless of our needs (usually the most expensive one). Behind the scenes, there's often a SPIFF (Sales Performance Incentive Fund) driving this behavior.
While SPIFFs might temporarily boost specific product sales, they fundamentally misalign sellers with customers. The moment customers sense they're being pushed toward products that serve the salesperson rather than their needs, trust erodes and they start running towards the door.
3. Discouraging discounting through comp structures
When sales leaders claim they want their team to "think like CFOs," they're typically expressing frustration with excessive discounting. However, adjusting commission structures to reward profit margin rarely fixes the problem.
One Fortune 500 technology company tried paying commissions on gross profit instead of revenue, hoping to encourage the sales team to avoid discounting. After a year, they found that discounting behavior remained virtually unchanged. The sellers' mentality that "70% of something is better than 100% of nothing" persisted despite the altered incentives.
Sales leaders—the next time you're tempted to modify the comp plan to drive different sales behaviors, ask yourself: Is this truly a compensation issue, or have I failed to provide the coaching and strategic guidance my team needs to succeed?
The best salespeople aren't simply coin-operated machines—they're professionals who thrive when equipped with purpose, strategy, and leadership rather than just another “new and improved” comp plan.
