Are These the Best Practices in Collector Compensation?

A number of years ago, insideARM.com conducted a pretty comprehensive compensation study for the ARM industry. Among other data collected, we asked about commission programs for collectors.

My hope was that we could categorize all of the responses into a useful table; 15% do this, 30% do that, etc. Unfortunately, there was such a wide variation that this categorization proved impossible, and we simply published, verbatim, what everyone said.

There were well over 100 responses, which were sorted by company size. The responses for $1.1 – $2 million (revenue) agency category are listed below.

I’d be curious about the following:

1.      Have your compensation programs changed in the years since we conducted the study?
2.      If we conducted a current study, would you participate? (feel free to respond in the comments below, or email me)
3.      I also wonder whether the various commission or bonus programs in use have an effect on the ability to adhere to company missions, policies, or training curriculum that promise/encourage things like educating the consumer (which is time consuming), and other complaint-minimizing behaviors?

Here are the responses for companies with revenues between $1.1 million and $2 million. Tell me what you think.

We have incentives in place for reaching both monthly and annual revenue goals.
25% of fees collected after goal is met.
Group bonus off of a combination of daily group goals. 1% of gross $’s collected over individual goal.
14% of gross collected every two weeks of $7 per hour, whichever is greater. If they break $10k in a 2 week period they get 2% increase on gross. -$50 for AG complaints, -$25 for BBB complaints. Western Union mystery sheet bonuses of $50-500 once per week. Direct payments to clients get 12% commission no matter what.
Base hourly pay plus bonus for surpassing established goals.
It is based on gross cash collections.
Sliding scale starting with $4k commission ($90) amount increases as commission increases. We expect our collectors to generate much more than the $4000 threshold.
Collectors receive their hourly rate for collecting up to their monthly goal. They receive $250 for achieving their goal, and an additional $100 for every $2,000 in gross collections.
Collectors receive 25% of net commission after they collect 3.25 times their monthly salary/pay.
Scale of recovery $0 – 10,000: $100 commission. $10,000 – $25,000: $200 commission, etc.
Fees $4500, commission 15%. Fees $7500, commission 17%. Fees $9000, commission 19%.
New hires are guaranteed a certain commission for a period of one year. After that they earn commission based on collection fees.
25% of fees over quota.
Percent of fees generated 20% less base of hourly pay.
Four levels based on net dollars produced. First level equals $500 per month. Second level equals $1,000 per month. Third equals $1,500 per month. Fourth level equals $2,200 per month.
25% of all fees generated by a collector over a monthly base. Shortfalls do not carry forward.
25% of what they collect less their salary.
Monthly goal based on 10% of active accounts in collector’s portfolio (work drive). Commissions are paid based on an increasing scale of dollars collected. Commissions start at 1% of collections up to 3.5%.
Three, four or five times their monthly base salaries.
Monthly bonus program based on payments on promise.
They receive a percentage after they reach a break even.
5% for small balance & new hires. 7.5% for their next raise (based on fees earned). 10% for sr. collectors over 5 years.
We base it on the amount of commission they generate.
It is a sliding scale bonus based on net collected dollars. The scale bonus begins after net collected fees hit the $10,000 level for the month.
A percentage over their goal, i.e. 4% over $40k, 5% over $50k, etc.
Based on percentage of quota earned; 100% – 103.99% = $200. %104 – 105.99 = $300, etc. up to 135% + = max $1,000.
Quota is 4 times salary. Collector is paid 22.5% of fees generated in excess of quota.