7 Books to Read Now About Sales Compensation




January 18, 2017

Jennifer Dignum, Sr. Manager, Content Marketing, Xactly Corporation

At its heart, compensation is a very human – and personal – issue. It’s how we are rewarded for the jobs we do – and how we earn our livelihood. It’s a value placed on the worth of our work and services.

As such, it can be emotionally charged. When value is misplaced, it can cause friction, angst, and poor performance. For businesses, if compensation is not allocated and dispensed appropriately, it can result in employee dissatisfaction, turnover, and lost revenue.

On the flip side, when done correctly, compensation motivates behaviors, strengthens employee commitment and increases productivity. Subsequently, if you’re looking to make a change to your compensation plan in 2017, it pays to do your homework.

Luckily, compensation is a topic that’s been extensively researched, written about and discussed – both from an academic and business standpoint. However, with so many books, it’s difficult to know which ones will give you the data most relevant to your particular situation and organization.

To help, I sat down with Erik Charles, vice president of product marketing at Xactly and a recognized expert on compensation planning and incentive compensation. I wanted to find out what’s on his bookshelf and his ‘must-reads’ for sales compensation. Here are his top seven picks and why.

Compensating the Sales Force by David Cichelli

When Erik has a new hire, he makes a point of giving them a copy of David’s book. A primer on the field of compensation, the book covers everything from determining target pay to choosing and monitoring performance measures to setting the right quota. It’s a book that provides value for companies of all sizes and in all industries. Erik has presented jointly with David on multiple occasions and appreciates his clear and straightforward approach in explaining how to build effective and winning sales reward programs.

The Complete Guide to Sales Force Incentive Compensation by Andris A. Zoltners, Prabhakant Sinha and Sally Lorimer

Considered the ultimate textbook on sales incentives, this book from ZS Associates shows organizations how to motivate sales teams through compensation, covering everything from design to implementation in a practical step-by-step style. The book features hundreds of real-world examples to highlight the types of incentive plans work best – and the ones that don’t – such as overusing incentives to compensate for management problems, for example. Discussion areas include plan testing, aligning plans to company culture, and the importance of setting fair and realistic goals.

The Future of Sales Compensation by Chad Albrecht and Steve Marley

Another tag team of thought leaders at ZS Associates, authors Steve and Chad recently collaborated on a forward-looking book about trends in sales compensation. Published in 2016, the book encompasses how technology will change how organizations design and administer compensation plans – and how organizations can leverage these advances to drive higher performance. With big data starting to impact compensation planning, Erik thinks this book delivers timely insight on the future of sales compensation.

Game the Plan by Christopher Cabrera

According to Erik, Christopher Cabrera’s book delivers a fun and anecdotal look on sales compensation from the sales rep’s perspective. The book also takes a deep dive into the science of motivation – and how managers can better understand and harness individual motivation to drive higher results. Including several self-assessment exercises, the book gives readers multiple ways to improve their incentive strategy effectiveness.

Incentive Management by James A. Lincoln

You may not have heard about this book but – according to Erik – it’s a classic read on the benefits of driving employee motivation by placing value on the individual. The author applied his incentive approach at his own company, Lincoln Electric – building an American powerhouse without layoffs. Lincoln Electric was a forerunner of the philosophy that incentives drive professional development by empowering employees to further develop their own abilities. (According to Erik, their welding rigs are great as well – he bought one for his father for Christmas.)

Managing Through Incentives by Richard B. McKenzie and Dwight R. Lee

While in graduate school, Erik attended a microeconomics course taught by author Richard McKenzie. Richard’s combined interests in technology and incentives kept him interested and entertained, leading to a friendship that continues to this day. This book, co-authored with Dwight R. Lee, provides a thorough overview of incentives, from both a practical and theoretical standpoint and includes many real-world examples. And while monetary incentives do motivate, the authors also encourage readers to pay attention to non-monetary incentives to drive higher employee performance.

What Your CEO Needs to Know About Sales Compensation by Mark Donnolo

When Mark sent Erik an early copy of this book (AKA Connecting the Corner Office to the Front Line) a few years book, Erik knew immediately this book nailed the issue. So much so that he decided to tag along with Mark for the book tour. One of the only books to approach compensation solely from the perspective of the C-suite, it gives executives a guide to understanding the power of sales compensation on reaching business goals. Mark brings 25 years of experience in sales compensation planning to the book, in which he outlines how leaders can best connect business strategy to compensation planning.