Glaxo Overhauls Bonus System For Sales Reps

8 Comments

sales-repIn yet another bid to slash costs, GlaxoSmithKline is turning compensation for sales reps upside down. The drugmaker will no longer pay bonuses based on achieving sales targets and, instead, will pay them extra based “primarily on the service they deliver to customers.” How will this be measured? Bonuses will be determined, in part, by customer feedback, and by whether reps adhere to “values of transparency, integrity, respect and patient-focus.”

“Physicians have been telling us they want to see fewer sales professionals, and those they do see need to provide greater value in helping improve patient health,” says Deirdre Connelly, who heads Glaxo’s North America Pharma biz, in a statement. “We’ve spent a good deal of time listening to our customers, and they are asking us for more information about reimbursement, disease education, and support for improving patient health. The changes we are making to our sales compensation system will enable us to align our financial incentives to activities that offer appropriate value that is consistent with our company values.”

The move comes as Glaxo, like its peers, is laying off hundreds of sales reps and fighting court battles over whether reps should be paid overtime. By changing the criteria for bonuses, perhaps Glaxo hopes to bolster its arguments that reps should be exempt from the overtime provisions of the Fair Labor Standards Act and, therefore, should not be paid overtime. Drugmakers argue reps are outside salespeople who close sales because the primary customer is the physician (back story) and reps have discretion as they go about their work. With this new bonus system, Glaxo is now placing still more emphasis on having reps find ways to please docs.

But what do Glaxo reps think? A quick perusal at CafePharma, which some consider an electronic bathroom wall, provides some insights. “This is a political pr move which is a way for GSK to screw the reps out of making any money,” writes one person. “…This is a disaster tell me how you will motivate your sales force…Also can they reprimand you if your sales are bad? Is there a pip (peformance improvement plan)? Are there coaching reports, goals? They can’t have it both ways.”

“What is the point of trying to sell anything?” another rep carps. “Most docs don’t want to see us and don’t want to be detailed anyway. So does this mean that if you give the docs what they want, you will get a better evaluation because they like you for not selling to them? So you may get bigger bonuses for just socializing instead of selling? If that is the case, then I may hit the jackpot!”

“This is amazing,” writes a rep. “Why try to sell if sales results don’t matter? The reps who remember birthdays and are all fluff now have the advantage over sales professionals who sell with science when given the opportunity.” And another adds: “Oh, great. We are going to be evaluated by customers we shouldnt even be seeing. Only physicians who will evaluate us are those who see 5-6 patients a day - the busy physicians who we really see don’t have time or care if they evaluate us.”

“I currently have 3 doctors in my territory that ‘report’ my sales calls. The physicians hand my the form and I fill out the data on how I did. Love this ’cause now I will get a huge bonus check becase my doctors are very pleased with my service. Now my poor sales DO NOT MATTER. Love this company,” writes still another alleged rep.

Jump to comments

Share

Comments

  1. As a rep I expected this sooner or later, but not wholesale and immediate. This is a huge game changer for us.

  2. It seems like this policy would encourage inappropriate marketing practices, while giving the company overall something to hide behind.

  3. Perhaps, but why sell off label if sales don’t matter?

  4. This policy is referring to individual bonuses. I would assume that pay raises and management bonuses are still dependent upon product sales.

  5. This is not an isolated situation. Like health care reimbursement to doctors it is a move away from metrics-driven compensations (i.e. number of procedures performed) towards quality based compensation. With all due respect to the reps on this thread we all know how some reps manipulate their call outcomes to make their “numbers look good” so as to earn their bonuses.

    When your compensation is purely tied to metrics and you “hit your numbers”, then your manager has little wiggle room on the payout front. With an amorphous performance objective such as “quality”, the managers have much more wiggle room to lower compensation.

    Is this move mostly designed to save the company money? No doubt about it.

  6. And then there is this http://www.cafepharma.com/boards/showthread.php?t=430905 link from cafepharma that Jim Edwards at BNet included in his article/take on the story:

    My coworker one territory over is sleeping with TWO of her docs. Flirts with dozens more. If you ask a dr which rep makes them feel all “happy”- of course she’ll win it hands down.

    The industry became about buying people food years ago, and this only cements that perception when we as an industry need to be moving away from it. So if you like some crappy Starbucks drink and I bring it to you every week and never say anything product related, vs. a different rep who has actual clinical conversations with you but doesn’t bring you your favorite mocha frappachino every week- the one having actual details should get penalized?”

  7. whoops, put this in the wrong thread -

    a little humorous take on this perky news -
    http://tinyurl.com/2dsrds3

  8. Now my poor sales DO NOT MATTER. Love this company,” writes still another alleged rep.

    Wanna bet she’s gone. There was a very large layoff this past fall.

Leave a Comment


7 - = four

Subscribe

RSS Feed

Comments feed for this post only.

Clear

Clear

All rights reserved, UBM Canon. Copyright, UBM Canon.

Thanks for trying out the new Pharmalot printing tools. If you're got any suggestions for how we can help you print better, please let us know by clicking on the contact link at http://www.pharmalot.com/