When Tyro embarked on an accelerated growth agenda two years ago, we looked into our sales compensation system. It’s always good to check that you’re putting your money where your mouth is.
Our remuneration consultant was adamant: In his personal view, incentive compensation is stupid, but business leaders are too scared to get rid of what amounts to a “slot machine” ideology. We searched but we could not find an organisation in Australia that trusted its sales force enough to pay just an appropriate fixed salary. Wherever we looked, quotas, commissions, bonuses and on-target earnings, were the norm.
When we initially build our sales team, we also just imported the traditional compensation model. What such a system, no matter how sophisticated, really says is that the organisation does not trust employees to do their job unless they are financially incentivised. More importantly, it says that the actual sale or final outcome is worth more than looking after the customer and working in an ethical manner. It also underlines the attitude that it is more lucrative to look after yourself rather than assist a struggling colleague or contribute to the excellence of the entire team.
At Tyro, we pay all our employees a fair fixed salary for their talent and efforts. We also have each team member share in the wealth creation by distributing 21 percent of our share capital to employees in the form of a share option plan. Thus, we protect our people from ethical dilemmas involving honesty with a potential customer i.e. fully disclosing, truthfully advising on and fairly pricing our products. Nobody needs to focus, deal by deal, on their own compensation or their ability to support themselves and their families.
The result, in our still small but growing Tyro world, is a stellar sales performance. As far as we can tell, Tyro delivers the fastest growth rate and the best retention rate in the industry. In September, the sales team broke all records with a new monthly transaction volume of $27 million contracted with small and medium businesses joining the Tyro community in that month alone.
The entire Tyro team, sales, engineering, support and all others can be very proud of this achievement because it is not the cash at the end of the month that inspires us; it is doing the right thing by the team, our customers and the community. And by following that path we all are rewarded with the success of “making a difference”.