The People and Politics of Sales Compensation: Part 2

This is the second in a two-part series. Read part 1 here.

While the group of folks charged with designing a sales compensation plan can put the “fun” in dysfunction, the group can also work beautifully together. After all, they share a common goal: to create a comp plan than harnesses all that power behind the sales force, and make everyone some money.

This year, thanks to the pandemic, the planning may be even trickier than it was in the past.  In part 1 of this series we described the ideal team. Here we detail four key points to bear in mind as your planning sessions kick in.

Consider your current mix of people and the following key points when creating the sales compensation design team.

  • Listen to the sales organization. As participants in the plan, this group can offer insight into how well the plan works, as well as any challenges such as COVID-related setbacks, slowdowns, shutdowns, layoffs, or furloughs at customer sites. Interview sales managers, survey front line sales reps and be receptive to feedback.
  • Include a cross-section of leadership in the planning and design process. Leaders from the major functions involved with sales and sales compensation should be included when making major decisions. Involving executives from sales leadership, financial leadership, administration leadership, and human resources leadership ensures each organization has a voice at the table—and can share what they are learning about the pandemic and the economic recovery that is expected to follow it.
  • Follow a design guide and establish a decision-making procedure. A design guide outlines the process – soup to nuts – of evaluating and creating a sales compensation plan that is aligned to the goals of the business. A guide keeps people on track and focused on the strategic goals of the plan, and prevents individual functions from getting sidetracked by a separate agenda. Make sure the guide outlines how decisions will be made within the group to prevent disagreements from becoming stalemates. If you used a guide last year, we recommend that you brush it off, review it, and make updates appropriate to the unprecedented period we are now experiencing.
  • Gauge – and then respect – your CEO’s level of interest in the design process. While some CEOs like to be involved as the compensation plan is designed, others just like to hear the final number. If your company’s CEO is the latter, be sure to brief him or her on the latest learnings about the pandemic’s effect on sales and how your sales organization is responding to change.

We’d love to hear who is involved in your organization’s sales comp design team and how it works — or doesn’t. Let’s start a conversation!

For more insights and suggestions about sales compensation and how your organizations can work together effectively, read What Your CEO Needs to Know About Sales Compensation.