1. Keep it simple.<\/strong>
\nA straightforward plan makes it easy for reps to see how they’ll be paid. Don’t confuse and demotivate your reps with plans that try to do too many things. A plan is considered too complex if there are more than three to four performance metrics in the plan, or 10 or more conditions exist to determine credit allocation and payment release. Complex plans are hard to administer and maintain: They make it difficult to set up plans, to generate accurate results, and to timely respond to inquiries and disputes from sales reps. This can cause significant payee satisfaction issues.<\/strong><\/p><\/blockquote>\nI see that rule broken more times than you can count.\u00a0 I’ve been a sales rep under a complex plan where we had to have multiple meetings at the end of each quarter to reconcile the amount.\u00a0 My sales manager and I would spend multiple 30 min. meetings going back and forth on our “interpretation” of the plan and the commission owed.<\/p>\n
The adverse side effect was the fact that even though I was making very good money, I was frustrated by the quarterly battle I encountered.\u00a0 I usually felt like I had been slighted even with the sizeable check.\u00a0 Talk about demotivating.<\/p>\n","protected":false},"excerpt":{"rendered":"
Every year we find December to be a fertile time for sourcing salespeople.\u00a0 One of the biggest reasons – the upcoming year’s compensation plan.\u00a0 More specifically, new commission plans tied to new quotas.\u00a0 The salespeople receive the new plan and are, well, disgruntled.\u00a0 Or ticked off. Good salespeople tend to look outside for new opportunities when their commission plan gets over-adjusted following a strong year.\u00a0 Let me speak clearly here – I am all for raising the bar, but you do have to take all factors into account before setting the new targets. ManageSmarter.com offers up this article – Fast Track Your 2008 Sales Compensation Plans – with 10 tips… Read More<\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"bgseo_title":"","bgseo_description":"","bgseo_robots_index":"","bgseo_robots_follow":"","_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[20,23,4],"tags":[45,120,1764,121],"class_list":["post-1328","post","type-post","status-publish","format-standard","hentry","category-compensation","category-retention","category-sales-management","tag-commission","tag-commission-plan","tag-compensation","tag-sales-compensation"],"jetpack_publicize_connections":[],"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p5Oho-lq","jetpack-related-posts":[{"id":1501,"url":"http:\/\/selectmetrix.com\/blogs\/2008\/04\/sales-retention-through-compensation\/","url_meta":{"origin":1328,"position":0},"title":"Sales Retention Through Compensation","author":"Derrick Moe","date":"April 4, 2008","format":false,"excerpt":"Commission-only sales plans are risky in my opinion.\u00a0 I know they are the truest form of selling - you eat what you kill.\u00a0 I simply think that many salespeople view this structure as a lack of commitment from the company.\u00a0 I'm not saying that is accurate, but I have talked\u2026","rel":"","context":"In "Compensation"","block_context":{"text":"Compensation","link":"http:\/\/selectmetrix.com\/blogs\/category\/compensation\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1676,"url":"http:\/\/selectmetrix.com\/blogs\/2008\/07\/compensation-consternation\/","url_meta":{"origin":1328,"position":1},"title":"Compensation Consternation","author":"Derrick Moe","date":"July 25, 2008","format":false,"excerpt":"I know, lame title, but I couldn't resist. ManageSmarter.com offers up this article - Compensation Complexity Hinders Sales - regarding current compensation plans.\u00a0 Here are some numbers they quote within the article (my editing): Only 41% of sales leaders were satisfied with their current compensation plans (down from 59% two\u2026","rel":"","context":"In "Compensation"","block_context":{"text":"Compensation","link":"http:\/\/selectmetrix.com\/blogs\/category\/compensation\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1667,"url":"http:\/\/selectmetrix.com\/blogs\/2008\/07\/you-get-what-you-pay-salespeople-for\/","url_meta":{"origin":1328,"position":2},"title":"You Get What You Pay Salespeople For","author":"Lee Fratzke","date":"July 18, 2008","format":false,"excerpt":"We have really come to enjoy Dave Stein's posts.\u00a0 They are timely and cut straight to\u00a0the heart of the issue.\u00a0\u00a0Today's post is no exception.\u00a0 Working strictly on the sales side of organizations, one of the areas we look at while profiling their sale is compensation.\u00a0 Most\u00a0importantly, we look to see\u2026","rel":"","context":"In "Compensation"","block_context":{"text":"Compensation","link":"http:\/\/selectmetrix.com\/blogs\/category\/compensation\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":2029,"url":"http:\/\/selectmetrix.com\/blogs\/2009\/05\/preset-for-mediocrity\/","url_meta":{"origin":1328,"position":3},"title":"Preset For Mediocrity","author":"Derrick Moe","date":"May 20, 2009","format":false,"excerpt":"SellingPower.com\u2019s article deals with something we have seen throughout our many years of sales assessing, hiring and coaching \u2013 financial comfort zones.\u00a0 Here is a good explanation of it from the article (emphasis mine): Eker stumbled on the concept of financial blueprints while running his first company, a fitness business.\u2026","rel":"","context":"In "Compensation"","block_context":{"text":"Compensation","link":"http:\/\/selectmetrix.com\/blogs\/category\/compensation\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1276,"url":"http:\/\/selectmetrix.com\/blogs\/2007\/11\/you-cant-get-a-players-with-a-b-company\/","url_meta":{"origin":1328,"position":4},"title":"You Can’t Get "A" Players With A "B" Company","author":"Derrick Moe","date":"November 6, 2007","format":false,"excerpt":"This truth is one that we cannot utter to our customers, but it is critical in assisting a company to upgrade their sales team.\u00a0 Implicit in this statement is the fact that some companies, when it comes to sales, do not provide an \"A\" level opportunity. The reasons companies do\u2026","rel":"","context":"In "Hiring Salespeople"","block_context":{"text":"Hiring Salespeople","link":"http:\/\/selectmetrix.com\/blogs\/category\/hiring\/hiring-salespeople\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1419,"url":"http:\/\/selectmetrix.com\/blogs\/2008\/02\/the-social-salesforce\/","url_meta":{"origin":1328,"position":5},"title":"The Social Salesforce","author":"Derrick Moe","date":"February 13, 2008","format":false,"excerpt":"Salespeople are motivated by many factors, but the primary, most common motivation is Utilitarianism.\u00a0 The drive is for a return on investment.\u00a0 Most people first think of money which is a good example, but it is bigger than that.\u00a0 It involves a return on time, effort, energy, resources, etc.\u00a0 72%\u2026","rel":"","context":"In "Compensation"","block_context":{"text":"Compensation","link":"http:\/\/selectmetrix.com\/blogs\/category\/compensation\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"jetpack_featured_media_url":"","_links":{"self":[{"href":"http:\/\/selectmetrix.com\/blogs\/wp-json\/wp\/v2\/posts\/1328","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/selectmetrix.com\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/selectmetrix.com\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/selectmetrix.com\/blogs\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"http:\/\/selectmetrix.com\/blogs\/wp-json\/wp\/v2\/comments?post=1328"}],"version-history":[{"count":0,"href":"http:\/\/selectmetrix.com\/blogs\/wp-json\/wp\/v2\/posts\/1328\/revisions"}],"wp:attachment":[{"href":"http:\/\/selectmetrix.com\/blogs\/wp-json\/wp\/v2\/media?parent=1328"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/selectmetrix.com\/blogs\/wp-json\/wp\/v2\/categories?post=1328"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/selectmetrix.com\/blogs\/wp-json\/wp\/v2\/tags?post=1328"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}