On April 27, #HewlettPackardEnterprise held an all-hands meeting for the thousands of people in its North American sales force and apologized to them. The company's internal software, which tracks how much each person has sold and their sales commissions that form the bulk of their pay, was still not working properly, a top #HPE exec said matter-of-factly. "As you know, sales compensation has faced some challenges with data that's being recorded in MyComp," Cheryl Brown, the vice president and COO of HPE's Americas Enterprise Group, told the group on the phone, according to a recording Business Insider heard. "Upstream data flows slower than expected, and/or links between orders and customer account names were disconnected." For HPE's salespeople, the failure of the internal system, called MyComp, means their employer has no idea about their actual sales performance. That has caused serious inconvenience and stress for employees, many of whom have had to borrow money from HPE to make ends meet. Many valuable salespeople got so fed up that they left the company, multiple people told Business Insider. It's also an embarrassing situation for HPE, a $31 billion company whose business is built on selling and installing complex tech products for other companies. And it couldn't come at a worse time, as HPE steps up efforts to shape its newly independent identity and tell its story to prospective customers and employees. Brown told the salespeople that the IT department had fixed a lot of the issues and that they would have the option to borrow against their anticipated commissions through June. "We know this has been a source of frustration for many of you, and we apologize for that," Brown said. While HPE knows how much total product it has sold, the information it has been sharing with salespeople about their individual performance is unreliable, the company said. An HPE representative said the company has had chronic problems accurately informing salespeople about their compensation for the second year in a row, since Hewlett-Packard spun off HPE. The company insists, however, that it has been paying its people accurately and that just the reporting part hasn't been right. The representative said: "Our salespeople have been paid accurately and on time, and it would be wholly inaccurate to suggest otherwise. While our recent separation activities have contributed to challenges with the systems used by our sales force to have visibility into their compensation, these issues have no impact on their actual compensation. As a result of the challenges we have given impacted salespeople a choice between remaining on our draw program or moving to incentive compensation until all of these issues have been addressed." Working hard and in debt to the company To decode HPE's message a little: Even though HPE says everyone's paychecks are accurate, it decided to offer its entire North American sales team an option to continue to take a so-called draw through May and June. The draw began in November, in its first quarter.
A draw is when a salesperson borrows against their future earnings. It's a common practice for companies that employ people who earn a commission, particularly at the beginning of a fiscal year when deals haven't closed. It lets salespeople earn a steady paycheck while waiting on commissions.
But it's also dangerous. If the salesperson doesn't ultimately sell enough to repay the draw, they may end up owing the company money.
Some people who are being told they owe HPE money when they feel they don't are calling it quits at the company, one salesperson said.
"Some people have left," the person said. "One guy in my region, they said he owed $50,000. When he quit, he told them, 'I don't know what to tell you. I don't have your $50,000.'"
The salespeople we talked to said they didn't feel confident their compensation was being tallied correctly.
"There are deals from other reps that were returned or rejects that are placed on my account, and deals that I did close are on other people's accounts. There are people that will go even further into liability due to improper reporting," one person said. "I have fulfilled 30%-plus of my quota, yet I show -5% obtainment."
The cobbler's children
The issue HPE apparently is having, according to one salesperson, is tracking sales through distributors, which warehouses products and deals with shipping and delivery. Salespeople work with customers in their territories to make a sale, but when the customer orders the product, it is sold through a distributor.
There are also times when a salesperson works with a partner, a smaller reseller that orders the product from the distributor and then installs it. Keeping track of which person gets credit for the sale is the problem, multiple salespeople said.
Pretty much all big companies that sell computer hardware and work with partners do so through distributors. But others don't have problems tracking this kind of data on a companywide scale, salespeople told us.
And HPE is actually in the business of designing and installing large, complex IT systems — it calls this "digital transformation." It should be able to create an internal system for its own use. So this situation is little like the cobbler's children who, according to the proverb, never have shoes.
It has been especially frustrating for the salespeople who work for Aruba, the wireless-networking company HP acquired in May 2015 for $2.7 billion, some of those people said.
Several Aruba salespeople said their compensation-tracking system worked fine until HPE migrated them to MyComp. By the end of this month, many people's options at Aruba will be fully vested, and one person predicted a lot of them would quit.
Déjà vu
While this may just sound like an oddball glitch in one of HPE's internal IT systems, it has been going on pretty much since HPE has existed as a company.
Business Insider first reported on these issues in July.
In 2016, a group of sales managers met with CEO Meg Whitman and lambasted her about the situation, telling her that thousands of people had not been properly paid for months. People said last year that HPE had miscalculated some people's pay by $40,000 to $50,000 because the software it used for tracking their compensation worked so poorly.
We heard stories of salespeople who couldn't make their mortgages and were facing foreclosure or falling behind in their alimony payments.
The situation got so bad by the middle of last year that an expletive-laced email highlighting the problems made waves inside and outside HPE. The email, which supposedly had been written by a top HPE salesperson but turned out to have been spoofed, was sent to the top sales brass as well as to Whitman and a bunch of the company's distributors, several people confirmed to Business Insider.
In any case, whoever sent it used a lot of salty language to express discontent with the compensation problem. Several people said the email was shared all over the industry.
After that meeting last year, Whitman jumped on the situation, ordering her top sales lieutenant to send an apology email and fix the problem pronto.
About seven months into that fiscal year, the problem appeared to be fixed — and that's why when it cropped back up this fiscal year and dragged on again for seven months, salespeople became doubly upset.
The people who haven't quit are frustrated, but they remain hopeful that the company will get its act together and are betting their livelihoods on it.
"I have personally accessed the home-equity line against my house," one person said. "I think it will eventually shake out. This happened last year and took six to seven months."
