The Three 'Magic' Kings

Like every year, yesterday (on the eve of January 6) the Three Holy Kings arrived in my town. It is important to mention that in Spanish they are 'Magic' instead of 'Holy'. Although it is not the real reason, many believe that they are called like this because the Three Kings, like Santa Claus, magically deliver in only one night presents to millions of children that have been good during the year. Toys that the kids find in the morning and can enjoy playing with all day because January 6 is always a public holiday in Spain.

However, who will remember "Melchor, Gaspar and Baltasar" in a couple of weeks time? Do you really think that children keep (or start) behaving well for the next 11 months to secure next year's toys and presents? I don't, next January is way too far away.

Like the Three Kings, also at the beginning of each year, Vortex delivers our staff bonus on top of their fixed salaries: individual commissions on sales and dividends for the shareholders. In this sense we are a quite a normal company.

However, I'm personally against this traditional remuneration scheme and, if I were an authoritarian boss, I'd totally eliminate the commissions and simply distribute profits among everybody regardless of whether they are a shareholder or not. Unequally distributed, but not based on such condition only.

To be fair, a few years ago we already started doing this at Vortex: distributing part of our profits among non-shareholders. Meanwhile, sales commissions continue to be paid in the normal fashion, linked to individual sales performance. In my opinion this approach could throw up two main problems:

1-It might lead to inefficient sales processes: imagine, for example, that I keep chasing a French lead with my future commission in mind although I'm not the best salesman for that particular case since, in the company’s best interests, I should forward it to Aina who speaks better French than me.

2-More importantly: individual commissions just proportional to the final income may not fairly reflect the effort invested in a sale (which, f.ex. can be more difficult in some markets) or the talent and hard work of the whole team over many years designing and implementing a good product that is easy to sell. Or, most importantly, that a sale might simply be closed thanks to a stroke of good luck...

Let's go back to the Kings: while waiting for their return, Spanish children will just behave well (or badly) accordingly to how their parents have brought them up, what they have learned themselves and, at the end of the day, what makes them feel good, without thinking about next January 6 at all.

Maybe I'm too na?ve but I believe this applies to grownups too. As I recently told my friend Wiebke, I believe it is more important how we walk our way than what is achieved at the end. The rewards (like the profits) may come or they may not but, if they do, they are like the presents the kids receive from the Kings. Provided you are paid a fair wage every month, enjoying what you do every day should be reward enough, don't you think?

At this point you may therefore wonder why we keep paying commissions at Vortex. This is simply because, as I have often mentioned, I have never studied economics so the commissions and profit-sharing schemes in Vortex have been designed by educated MBAs who are more sensible than I am about this matter (and many others).

However, if I'm writing about this today is because, due to some imbalances, we are in the process of redesigning the old commissions structure. Hopefully, we'll build a fairer scheme, efficient and that duly acknowledges the effort and battles the good fortune.