Why Comparing Sales Bonuses to Procurement Savings is Misleading
The comparison—where a $100K sales win gets a $10K bonus, but saving $100K on a procurement contract gets nothing—might seem like a compelling argument for unfairness at first glance. However, this comparison oversimplifies the complex roles of sales and procurement teams. Let’s unpack this misconception from different angles. Different Objectives and Impact While it’s tempting to see a $100K sales win and a $100K procurement savings as equivalent financial achievements, their impact on business objectives diverges. Sales teams are revenue-generating and focus on top-line growth—bringing money into the business. A $100K contract directly boosts revenue, essential for business growth, performance metrics, and investor confidence. This tangible addition to revenue is why sales bonuses are usually tied directly to contract wins. Procurement’s role, however, centers around savings, cost efficiency, and risk management. A $100K savings may not affect revenue but enhances profitability by im