Practice Management > Building Your Business

Is it heresy to make salespeople pay their own expenses? An HBR management puzzle (Harvard Business Review)

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Imagine this scenario: Management feels the sales staff has become inefficient in their use of expense money and is floating the idea of making salespeople responsible for their travel, food and entertainment expenses. Instead of an annual budget, they are given a fixed amount—based on territory and past expenses—and allowed to keep what they don’t spend. This approach could help the sales force develop their awareness and skills at profit and loss management, which could allow the company to peg incentives not only to volume but to profitability of sales in the future. Would the sales team quit or reluctantly get on board with management’s idea?