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Thread: Commision

  1. #1
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    Commision

    I am in the process of trying to convince my boss to employee a commision structure in our practice and I would like some advice. I need to know if anyone has a commision structure where they work and what it includes. I would appreciate any feed back or any ideas.

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    Master OptiBoarder Cindy Hamlin's Avatar
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    Aboon,

    I have had commissions go a couple of ways and find the most successful is the pool incentive. It tends to keep all the sales people somewhat level. Of course the pool is paid out on what they actually sell by percentage so it gives the overachievers a chance to make more.

    It was tied to a % of the center's total sales up to 3 or 5% (if I recall). They had to sell as many pairs as last year (same month) and the same dollars for the specs to qualify and then the % of the pool went up from there based on the % of increase over LY. For the 2 top people I had it was almost another 2-weeks pay a month.

    I have also worked when it is tied to certain products, extras, etc and found that it increased the number of people that got items they were not fully aware of. Should we say deceptive? It also fostered a really cut throat atmosphere as the top people got really aggressive with the customers and almost had a fist fight or two when they perceived that someone "took" their customer. I had to tell them walking over to say "can I help you?" and walking away to finish with your customer while they looked for a frame did not constitute "yours"! It really caused a lot of problems and a lot of the lower level sales people were not given a chance.

    I like the pool as well as it fostered a "team" concept.
    ~Cindy

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  3. #3
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    Stick out tongue

    [QUOTE=Cindy Hamlin]Aboon,

    I have had commissions go a couple of ways and find the most successful is the pool incentive. It tends to keep all the sales people somewhat level. Of course the pool is paid out on what they actually sell by percentage so it gives the overachievers a chance to make more.

    It was tied to a % of the center's total sales up to 3 or 5% (if I recall). They had to sell as many pairs as last year (same month) and the same dollars for the specs to qualify and then the % of the pool went up from there based on the % of increase over LY. For the 2 top people I had it was almost another 2-weeks pay a month. }


    Cindy,
    Are you able to give me a few more details about the pool incentive, I dont want to foster a cut throat type atmosphere with my office staff. Nevertheless I want them to have an incentive to strive in sales. I think it is important to reward people for top performance, but I want to avoid high pressure sales. Any additional info. is greatly appreciated

  4. #4
    Ophthalmic Optician
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    My commission system: Show up, work your hardest, and I'll give you a good paycheck.

    I make all of my employees aware of the company's goals, objectives, and where we stand on them. We have profit sharing, and if sales are down, even due to outside factors, the employees stand to miss out on an average of $3500. The employees are always aware if we are in the middle of a "down" or "up" month, and the financials are pretty much an open book.

    I tried commissions about 15 years ago, for 2 weeks, but found that the back office employees didn't have the same opportunities to be rewarded, and there was too much emphasis on selling, and not informing. Our sales didn't improve during the trial time, and moral was down.

    If you're going to do commissions, the pool sound like the fairest. It sounds like you have an employer that needs to have the proof before the pay.

  5. #5
    Master OptiBoarder karen's Avatar
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    One of the offices where I dispensed just paid all opticians a flat percentage on everything they sold. It was a while back but I think it was like 3% or maybe 4. There were only 2 opticians so it wasn't too competitive.
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  6. #6
    On the Sunset Tour! Framebender's Avatar
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    We don't pay commission. . .

    but we do offer incentives. In one store we figured that rent, utilities, payroll and everything else came to 32K a month to keep the doors open and pay for product. Anything above that we take 2% and split it among all the full time employees. I am with Johns that everyone from the receptionist to the lab rat contribute to our success and should be rewarded appropriately.
    Days where my gratitude exceed my expectations are very good days!

  7. #7
    OptiBoard Professional William Walker's Avatar
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    I would give every patient that comes in your office a little survey questionaire when they leave the optical that they could bring back at dispense and drop in a box, or mail in. Leave it anonymous, and give the patients a cleaning kit for doing it. Then you start to find out who makes an impact with your patients, and what areas might need to be worked on. I'd treat a bonus just like most companies treat raises - it could be up to a certain amount or percentage, depending on their work, or in this case, satisfaction.
    William Walker

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    Vision Equipment OptiBoard Corporate Sponsor Leo Hadley Jr's Avatar
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    Are we interested in whats best for the patient or profits?

    What I have noticed over the years is that a commission based retail will push what is most profitable and that is where the commission is paid. Tints, A/R Coats, poly, 2 pairs are usually where the commission is offered. Progressive lens designs that the company gets the best deal on can be commissioned as well. I am not saying this is a bad practice. For a business it is a great decision for the bottom line.
    However, Mrs Smith who has been wearing a glass FT-28 for the last 40 years will probably leave your office with a polycarbonate "insert brand here" progressive with an A/r coat, and a gradient tint.

    This will not work, She will be back if she makes it out to the street.

    I am in favor of a percentage based system on total sales. This will encourage sales and speed of service and you will have less remakes and satisfied patients.
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  9. #9
    Master OptiBoarder optigrrl's Avatar
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    OpticLabRat posted:
    However, Mrs Smith who has been wearing a glass FT-28 for the last 40 years will probably leave your office with a polycarbonate "insert brand here" progressive with an A/r coat, and a gradient tint.

    This will not work, She will be back if she makes it out to the street.
    I do not agree, returns and redo's affect the bottom line. If the opticians and staff are compensated on a percentage of the profits then wouldn't it motivate them to keep costly remake's down to a minimum?

    I also think that it helps promote a more cohesive working environment. Now it's in every staff member's best interest to promote the practice as well as each other.

    :cheers:

  10. #10
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    Quote Originally Posted by OpticLabRat
    Are we interested in whats best for the patient or profits?

    What I have noticed over the years is that a commission based retail will push what is most profitable and that is where the commission is paid. Tints, A/R Coats, poly, 2 pairs are usually where the commission is offered. Progressive lens designs that the company gets the best deal on can be commissioned as well. I am not saying this is a bad practice. For a business it is a great decision for the bottom line.
    However, Mrs Smith who has been wearing a glass FT-28 for the last 40 years will probably leave your office with a polycarbonate "insert brand here" progressive with an A/r coat, and a gradient tint.

    This will not work, She will be back if she makes it out to the street.

    I am in favor of a percentage based system on total sales. This will encourage sales and speed of service and you will have less remakes and satisfied patients.
    That's a bunch of bull! I couldn't disagree more! I've switched many long time flat top wearers to progressives with few problems. Many of those people would have changed a long time ago if someone would have suggested something different to them. A person wearing Ft-28 for 40 years is well into their 60's and need some intermediate correction. You are not serving them well by continually saying "ok Mrs Smith we'll make you the same lens design AGAIN this year, you've got the best we have to offer"!

  11. #11
    Master OptiBoarder rbaker's Avatar
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    Let me state right off the bat that I am against commissions, spiffs, incentives or any other compensation plan of this type in the eye care field. If, management can not evaluate an employees worth to the practice and compensate the employee in an appropriate manner the employee is best served by moving on. Even the best designed plan is loaded with pitfalls, snags and things which go bump in the night.

    No matter how a plan of this type is laid out, the result is usually dissention and resentment among the troops. Lets face it, usually 75% of the work in an organization is performed by 25% on the employees. And the 75% of lounge abouts are the first ones to start trouble when they realize that they are making less than someone else. It’s just human nature. There are usually some ethical issues that raise their ugly heads but that is a subject for another thread.

    Perhaps my biggest issue with sales based remuneration is the simple fact that under this scheme the most valuable employee end up with the lowest pay. Take the case of a key employee who trains all of the new employees, bails out the lab when someone screws-up, fixes the computer and does a few refractions when things get busy. If he is on commission he is screwed.

    If the boss is too stupid, hasn’t the time to keep his finger on the pulse of his business or just wants to avoid the responsibility of sitting down with his employees and negotiating wages than he is a loser. Stay away from losers.

  12. #12
    Vision Equipment OptiBoard Corporate Sponsor Leo Hadley Jr's Avatar
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    Quote Originally Posted by CME4SPECS
    That's a bunch of bull! I couldn't disagree more! I've switched many long time flat top wearers to progressives with few problems. Many of those people would have changed a long time ago if someone would have suggested something different to them. A person wearing Ft-28 for 40 years is well into their 60's and need some intermediate correction. You are not serving them well by continually saying "ok Mrs Smith we'll make you the same lens design AGAIN this year, you've got the best we have to offer"!
    A bunch of bull??

    Let me clarify for you...........I too have switched many thousands over to progressive designs. That is not the point of the thread.
    My point is, Usually the companys with this commission structure also employ people off the street for 8 bucks an hour. These employees will push only what they are commissioned on and not whats best for the patient. That is a fact.
    Lets say for example "New Wave" progressive lens company comes to your headquarters and convinces your C.E.O. that this new progressive is the absolute best available and will sell them to you for 10 bucks a pair. Now your company will push this new lens and offer you a $25 commission for every pair you sell along with your tint commission and your A/R commission etc....etc...

    The $8.00 an hour employee will put every customer in that lens no matter what. Whether they are a 40 year FT wearer or a Varilux wearer. They will get the "new wave" and they probably wont be happy. THAT IS A FACT OF LIFE.

    RBAKER said it right,
    The most valuable employees will get screwed because they are dealing with some other problem in the store that the $8.00 an hour guy cant handle. Meanwhile $8.00 guy is greeting everyone who walks in the door and putting them in whatever is commissioned at that particular time.
    Last edited by Leo Hadley Jr; 04-15-2006 at 06:34 AM.
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  13. #13
    Independent Problem Optiholic edKENdance's Avatar
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    Quote Originally Posted by rbaker
    Let me state right off the bat that I am against commissions, spiffs, incentives or any other compensation plan of this type in the eye care field. If, management can not evaluate an employees worth to the practice and compensate the employee in an appropriate manner the employee is best served by moving on. Even the best designed plan is loaded with pitfalls, snags and things which go bump in the night.

    No matter how a plan of this type is laid out, the result is usually dissention and resentment among the troops. Lets face it, usually 75% of the work in an organization is performed by 25% on the employees. And the 75% of lounge abouts are the first ones to start trouble when they realize that they are making less than someone else. It’s just human nature. There are usually some ethical issues that raise their ugly heads but that is a subject for another thread.

    Perhaps my biggest issue with sales based remuneration is the simple fact that under this scheme the most valuable employee end up with the lowest pay. Take the case of a key employee who trains all of the new employees, bails out the lab when someone screws-up, fixes the computer and does a few refractions when things get busy. If he is on commission he is screwed.

    If the boss is too stupid, hasn’t the time to keep his finger on the pulse of his business or just wants to avoid the responsibility of sitting down with his employees and negotiating wages than he is a loser. Stay away from losers.
    WOAH! Very Well Stated!

  14. #14
    Master OptiBoarder Cindy K's Avatar
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    Quote Originally Posted by rbaker
    Let me state right off the bat that I am against commissions, spiffs, incentives or any other compensation plan of this type in the eye care field.
    Haleluja! Hear Hear! Couldn't have said it better myself.

    I, personally, as a consumer, will go to the ends of the earth to NOT do business with any business which employs commissioned sales people. End of story, simple as that. The commissioned sales associate is ONLY wanting to get the biggest buck, where I as a consumer are wanting the biggest BANG for my BUCK. Long ago I tired of the commissioned sales environment telling me what I wanted rather than me telling it what i wanted, often because brand A would put an extra X amount of money in their pocket, where brand B would be suitable for my needs and wants but carried less of an incentive for the sales person. Think of the repercussions this would have in the optical industry. As it is we opticians are often regarded as nothing more than 'sales clerks' by the unknowing price-driven consumer, who expects everyone selling a product or service is provided incentives. A commissioned pay schedule would do nothing more than reinforce this opinion and lend it credence.

  15. #15
    Vision Equipment OptiBoard Corporate Sponsor Leo Hadley Jr's Avatar
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    To answer the original question:

    I think the best solution would be a profit sharing plan rather than commision. This will guarantee that the employees will do whats best for the patient and the practice. It will promote teamwork and every employee will be aware of wasted costs and promote ideas to save money. Every employee will treat the practice as if it was there own.
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  16. #16
    Optician Extraordinaire
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    We used to have a system that was based on what you sold. Not anymore.

    Now since we have some people that are on the floor more then others we all make the same. Some people do more lab work and some people spend more time dealing with contacts. These people aren't selling as many glasses.

    Our spiff is based on total gross, net profit, and service. I like the fact that all the opticians make the same.

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