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8 Keys To Designing A Sales Comp Plan That Delivers
As competition for top sales people intensifies, companies have expressed the following concerns that are motivating them to review and/or update their commission plans:
By: Becky Regan
As competition for top sales people intensifies, companies have expressed the following concerns that are motivating them to review and/or update their commission plans:
By: Becky Regan
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* Able to attract & retain top tier sales people
* Know what the competition is paying for different levels of sales people & sales management
* Drive sales staff behaviors to achieve organizational goals for promoting products and generating revenue
* Understand comparable structures of competitive pay packages for sales people so they can customize a plan that fits their organization and sales team
In creating a sales compensation program that consists of base pay plus incentive pay = total compensation, following are key steps that need to be done in sequence to design a sound sales comp plan that delivers a good ROI:
1). Define your company's compensation philosophy. Create a statement for your company that reflects your senior management/CEO's philosophy about how the company wants to reward and retain its employees. Questions to ask include:
* Do you want to pay at, below, or above market rates for comparable jobs?
* Are you creating a "pay for performance" environment where your company will intentionally put more pay at risk to generate higher levels of performance?
* What kind of work/life programs will your company create in order to attract and retain the level of talent necessary to support the company?
2). Market price your sales jobs. Using updated job descriptions, perform a market pricing study based upon job content. Select published salary surveys in your industry, SIC code or geographic location to source data from 4-6 surveys. You'll want to get survey recommendations from your Sales VP, plus his "buy-in" on your own recommendations for salary surveys based upon your research. Then evaluate base pay plus incentive pay findings from salary surveys to determine comparable pay packages for sales people in your industry.
3). Define desired objectives of sales incentive plan. Work with your VP of Sales to define major categories for measuring sales performance, then have your VP establish and weight goals for each sales person.
Page 2
Becky Regan, M.A., CCP began her own consulting practice in 1995, Regan HR, Inc. to provide human resources consulting services to businesses in California. She has been successful in growing her business through reputation and client referrals. Her work as a consultant includes the full spectrum of HR technical expertise, including C-level recruitment, compensation studies (design, market and executive pay studies, sales compensation plans), training & teaching, interim assignments as a HR Director for organizations, and employee relations, including workplace investigations and written responses to formal complaints. For more HR tips and to receive my FREE "The Top 5 Secrets to Building a Better Organization that Every HR Pro Must Know" go to www.ReganHR.com.
* Know what the competition is paying for different levels of sales people & sales management
* Drive sales staff behaviors to achieve organizational goals for promoting products and generating revenue
* Understand comparable structures of competitive pay packages for sales people so they can customize a plan that fits their organization and sales team
In creating a sales compensation program that consists of base pay plus incentive pay = total compensation, following are key steps that need to be done in sequence to design a sound sales comp plan that delivers a good ROI:
1). Define your company's compensation philosophy. Create a statement for your company that reflects your senior management/CEO's philosophy about how the company wants to reward and retain its employees. Questions to ask include:
* Do you want to pay at, below, or above market rates for comparable jobs?
* Are you creating a "pay for performance" environment where your company will intentionally put more pay at risk to generate higher levels of performance?
* What kind of work/life programs will your company create in order to attract and retain the level of talent necessary to support the company?
2). Market price your sales jobs. Using updated job descriptions, perform a market pricing study based upon job content. Select published salary surveys in your industry, SIC code or geographic location to source data from 4-6 surveys. You'll want to get survey recommendations from your Sales VP, plus his "buy-in" on your own recommendations for salary surveys based upon your research. Then evaluate base pay plus incentive pay findings from salary surveys to determine comparable pay packages for sales people in your industry.
3). Define desired objectives of sales incentive plan. Work with your VP of Sales to define major categories for measuring sales performance, then have your VP establish and weight goals for each sales person.
Page 2
Becky Regan, M.A., CCP began her own consulting practice in 1995, Regan HR, Inc. to provide human resources consulting services to businesses in California. She has been successful in growing her business through reputation and client referrals. Her work as a consultant includes the full spectrum of HR technical expertise, including C-level recruitment, compensation studies (design, market and executive pay studies, sales compensation plans), training & teaching, interim assignments as a HR Director for organizations, and employee relations, including workplace investigations and written responses to formal complaints. For more HR tips and to receive my FREE "The Top 5 Secrets to Building a Better Organization that Every HR Pro Must Know" go to www.ReganHR.com.
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8 Keys To Designing A Sales Comp Plan That Delivers
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Recruit To Improve Relationships In The Workplace
8 Keys To Designing A Sales Comp Plan That Delivers
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