Sales quotas are benchmarks used by companies to mark the minimum number of units each sales employee must sell during a given period of time. While these numbers clearly state the conditions for continued employment, they do not provide managers with a lot of leeway in correcting behavior or improving performance. Employees may also react negatively to sales quotas and show a lack of initiative outside the company's minimum sales requirement. Sales quotas do nothing to help a supervisor or manager determine how much time or effort an employee puts into work tasks.

A data sheet filled with numbers doesn't show how a sales representative builds rapport with customers or generates repeat business. Additionally, an employee knowing he only has to reach a certain sales quota to keep his job may only work hard enough to stay employed. A supervisor or manager can do little to change this behavior as long the employee meets the minimum requirement. A business using a sales quota system to measure employee performance may be hampering its growth potential.

According to the Stanford Graduate School of Business, companies removing sales quota systems have shown increases of overall revenue of as much as 9 percent.

A business continuing to use a quota system for employees may continue to experience sluggish growth. Employees working with sales quotas don't have the same competitive spirit that drives employees in performance-based workplaces. Company Quota may still bring in high sales numbers, but there's little incentive to do so because employees only face negative consequences for failing to meet quotas. Rewarding employees for exceeding benchmarks is necessary to encourage competition and increase productivity from the company's sales teams.

This could manifest in lower Company Quota morale and decreased productivity. A business using a quota system for sales examines its previous sales history to determine future benchmarks.

Creating new sales quotas without using previous sales data is the equivalent to throwing a dart at a jumble of numbers and picking one. Employees respond better to goals based in factual data as opposed to idealistic sales quotas. Workers are also better equipped to reach these sales quotas if they understand previous sales performances. Managers and supervisors can gauge employee performances with the perspective of previous sales years. Jonathan Lister has been a writer and content marketer since Skip to main content.

Ocean City Brewing Company Columbia Employee Performance Sales quotas do nothing to help a supervisor or manager determine how much time or effort an employee puts into work tasks. Improving Company Profits A business using a sales quota system to measure employee performance may be hampering its growth potential.

Incentives Braxton Brewing Company Jobs Workers Employees working with sales quotas don't have the same competitive spirit that drives employees in performance-based workplaces. Setting Realistic Goals A business using a quota system for sales examines its previous sales history to determine future benchmarks.

References 2 Inc. About the Author Jonathan Lister has been a writer and content marketer since Accessed 05 March Lister, Jonathan. Small Business - Chron. Note: Depending on which text editor you're pasting into, 13 Films Company might have to add the italics to the site name.

Quota Definition of Quota by Merriam-Webster

Quota definition is - a proportional part or share; especially : the share or proportion assigned to each in a division or to each member of a body. How to use quota in a sentence. ... The company has imposed quotas on hiring. He lost his driver's license because he exceeded the quota of traffic violations.…

Quota share - Wikipedia

Also there are quota share insurance programs. Where the benefit and the premiums are divided proportionally among the insured. For example, three companies take out a $1,000,000 fire insurance policy on a quota share basis with company A assuming 50% ($500,000), company B 30% ($300,000), and company C 20% ($200,000).…

Home - Quotacom

OUR EXPERTISE Identifying a digital leader, building a high performance team or looking to identify your next professional challenge? Quotacom is a boutique executive search and consulting services firm that has been established to solve the hiring challenges of the world’s leading software vendors, consultancies and the businesses that they help to transform.…