Kevin, there are two things that guarantee success around compensation. The first is understanding what behavior you are trying to drive and the second is knowing what motivates your reps. Not all reps are competitive by nature and/or strictly motivated by money. Once you answer those questions you can build a plan that will make sense for your organization.
PS - Rolling out an incentive plan is a sales call. The prospect is your team so be prepared with great information as to the "hows and whys" and take the time to invest in this communication. Hope this helps.
Nik KellingleyHR, Training and Development Consultant, Self-Employed
Posted on Nov. 8, 2009
Trish has some good points. However you need to consider a few more things.
What kind of sales organisation do you have currently? What kind of sales organisation do you wish to be? What are the gaps between those two points? What more importantly, are the reasons for those gaps?
What do you need to do to close the gaps?
This all needs to be done in consultation with your people, there are many excellent sales people as Trish says who are not wholly money motivated, though I think they are a minority from my experience.
For those that are not money motivated, can you harness their enthusiasm by compensating them in other ways? Priority parking, flex-time, extra-holidays, extra-responsibility, or good old fashioned recognition, can all work wonders for some people.
Will those moving to a commission scheme lose some of their basic wage? If so you'll need to help them adjust to this fact, in some shape or form, either interest free loans, or a one off payment of the difference between there and their first bonus payment would be appropriate.
How will you communicate bonuses? Will they be top secret or common knowledge? My experience suggests that they always become common knowledge anyway, so you might as well start by publishing the details in full. But again your people can guide you on this, you may need to gradually edge that way, by say publishing a list of the top ten performers only in the first instance, and expanding later.
And you may need to say goodbye to some staff during this process. Commission based earnings increases the pressure on a salesforce immensely, I really enjoyed my time cold calling, but that's because I made a lot of money. I met many others who were totally miserable in this kind of environment.
It would be useful to time the introduction of this scheme, with some major sales training and coaching program launched at the same time. This way you can demonstrate to your people that you want to see them succeed and will support them to maximise their earnings.
2 Answers
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Kevin, there are two things that guarantee success around compensation. The first is understanding what behavior you are trying to drive and the second is knowing what motivates your reps. Not all reps are competitive by nature and/or strictly motivated by money. Once you answer those questions you can build a plan that will make sense for your organization.
PS - Rolling out an incentive plan is a sales call. The prospect is your team so be prepared with great information as to the "hows and whys" and take the time to invest in this communication. Hope this helps.
0
Trish has some good points. However you need to consider a few more things.
What kind of sales organisation do you have currently?
What kind of sales organisation do you wish to be?
What are the gaps between those two points?
What more importantly, are the reasons for those gaps?
What do you need to do to close the gaps?
This all needs to be done in consultation with your people, there are many excellent sales people as Trish says who are not wholly money motivated, though I think they are a minority from my experience.
For those that are not money motivated, can you harness their enthusiasm by compensating them in other ways? Priority parking, flex-time, extra-holidays, extra-responsibility, or good old fashioned recognition, can all work wonders for some people.
Will those moving to a commission scheme lose some of their basic wage? If so you'll need to help them adjust to this fact, in some shape or form, either interest free loans, or a one off payment of the difference between there and their first bonus payment would be appropriate.
How will you communicate bonuses? Will they be top secret or common knowledge? My experience suggests that they always become common knowledge anyway, so you might as well start by publishing the details in full. But again your people can guide you on this, you may need to gradually edge that way, by say publishing a list of the top ten performers only in the first instance, and expanding later.
And you may need to say goodbye to some staff during this process. Commission based earnings increases the pressure on a salesforce immensely, I really enjoyed my time cold calling, but that's because I made a lot of money. I met many others who were totally miserable in this kind of environment.
It would be useful to time the introduction of this scheme, with some major sales training and coaching program launched at the same time. This way you can demonstrate to your people that you want to see them succeed and will support them to maximise their earnings.
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