The title of this post is a shot across the bow of Red Bird since he and I go toe-to-toe on this topic. I am a strong proponent of letting the market determine executive pay. I trust the market as the best arbitrator of compensation. The principle works every time it is tried – if the executive is overpaid, he or she will be dismissed. If they are underpaid, he or she will receive an increase. Seems fair to me. I realize I am oversimplifying the issue, but I want to make a point. It does not bother me that the head of Exxon received a $400 million comp package.… Read More
Continue ReadingRetention – Bad Moves And A Good Move
If you have noticed in our posts, we are paying more and more attention to retention. (say that 10 times fast!) The employment market clearly indicates that it’s a hot topic. Over the years, two compensation moves really set off the negative alarms in my mind. They also made me, as a sales manager, more aware of how compensation impacts salesperson performance. Increased quotas. When quotas are increased (which isn’t necessarily “bad”), the first thing I always looked for was the corresponding compensation. If the message was “We need you to sell more,”that’s fine as long as everybody in the organization wins. However, trouble developed when the message came through… Read More
Continue ReadingAn Indirect Cost Of Turnover
We at The Hire Sense have been focused on employee retention this year. Pretty smart of us, I know (especially when the national unemployment rate is 4.4%). Michael at Hidden Business Treasures pointed us towards the Herman Group’s Trend Alert e-newsletter and I received my first one this week. The topic – wellness programs and their impact on benefits. This shocked me: The financial impact of healthcare spending is indisputable. Starbucks spends more money in one year on health insurance for its employees than it spends on coffee for its customers. The US automakers will spend more money this year on health insurance than they will on the steel that… Read More
Continue ReadingSales Manager Compensation for Retention?
A recent conversation brought to mind the responsibility of sales management for the development of both existing and new sales people. Why? Retention. As the employment market has shifted to an “employee market” – at least for talented sales professionals – sales management needs to make plans to retain sales people. After all, the talented sales person chose you and your organization, just as you chose them. Don’t kid yourself…this isn’t a one way street. Far from it my friends! Those tasked with the responsibilities associated with sales management (regardless of the title given them) have a wide variety of tasks that need their attention everyday. The investment in sales… Read More
Continue ReadingSmall Company Incentive Programs
Good article here from Selling Power’s Incentives newsletter – Big Motivation at Small Companies. The topic is how to run effective incentive campaigns when you aren’t a Fortune 500 company. Still, as a recent article in Incentive Magazine points out, smaller companies do enjoy a few incentives-related benefits compared with their larger counterparts. For one, with most of the company€™s employees occupying the same workspace, communicating with the entire team at the same time poses few logistical problems. Also, this sort of intimacy means that whoever is planning the rewards will likely have a better idea what specific prizes will motivate the targeted participants. Plus, as the article points out,… Read More
Continue ReadingWall Street Turnover
If you think you are experiencing hiring difficulties, be happy you are not on Wall Street: Fresh off some of the richest bonuses ever handed out, investment bankers and traders, especially those who deal with leveraged debt, are in high demand. In some cases, bidding has driven newly hired employees into the arms of a rival in mere weeks. That statement seemed like hyperbole until later in the article: Securities-industry employment rose to 804,000 at the end of 2006 after a third consecutive year of increases. The employment figure is just 4% shy of the all-time high set in 2000, according to the Securities Industry and Financial Markets Association. The… Read More
Continue ReadingFixing A Dis-incentive Plan
OK, the Rock Star really hit a nerve with his recent post – A Commission Plan Gone Bad. I’m having flashbacks to a comp plan that still makes the hair on the back of my neck bristle. When a comp plan becomes counter-productive -and the sales team is talking – you’ve created a monster. I can only think of one thing worse – have the paychecks bounce! The profile for the most productive sales people tells us that messing with compensation and the perception of deception is the beginning of the end for retention. Sales people want and need to believe that they are being treated honestly, fairly and with… Read More
Continue ReadingWho To Promote Into Management
CareerJournal.com offers When Managers Neglect To Coach Their Talent which covers a principle we incorporate into our process. “The role of people-managers — who develop talent and create sustained profits for companies — isn’t as valued as it should be,” says Mr. Harter, co-author with Rodd Wagner, also of Gallup, of “12: The Elements of Great Managing.” If it were, he adds, companies wouldn’t promote to management those who succeeded at a prior job but don’t have the foggiest idea about how to motivate people. Blame the top executives who simply grade their managers on their financial results rather than on how well they groom and retain good employees. The… Read More
Continue ReadingJust Getting Started
The decision has been made. The offer has been extended. The offer has been accepted, and the start date is just around the corner. The “newbie” is joining the sales team. Now what? That can be a bit of a scary question for the sales manager responsible for the success of a new hire. Hiring a candidate that has been and properly assessed, profiled, interviewed and evaluated is an excellent foundation for success. But hold on. It’s just the start to the process. As you might guess, an industry term to address these situations has already been crafted . “Onboarding” is the most commonly used term to reference the plan… Read More
Continue ReadingWhen a Raise is De-Motivating
We are asked from time to time about the best way to conduct an employee compensation review. I have to relay a story to you regarding a friend’s annual review. Here’s how it played out. She sat down with her manager and recieved a very positive review. She was told she was one of their better employees – recieving 3’s and 4’s out of 5 in all performance areas. In fact, my friend is the top person in her territory and the territory is ranked 2nd out of 8 in a large corporation. Everything was going well and she received a lot of verbal praise about her performance. Then the… Read More
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