5 Steps To Creating A Fair Sales Compensation Plan For Everyone | Leverage Ambition

The best part of sales is playing the game. The game can only be fair if there are fair and clear rules of engagement that make our daring sales teams ready to go to war.

When we talk about sales targets, we need to understand where the company has been and in turn where it needs to go. Once the sales manager has a good understanding of the numbers that need to be hit, they can understand what resources they need to hit them. In different management positions through out my career, I notice that having an understanding of what each team player needs to accomplish versus what each team player is capable of accomplishing are two totally different topics. Hiring is a big component of success and making sure to check references and past HR logs is helpful to understand how each player historically has performed previously.

The three big parts of the big cheese include the basic parts of any employee being successful in any system. This first includes autonomy. Each seller needs to be able to work independently after understanding the targets and quotas at hand. Giving them the space to work autonomously is important once you give them the leads and support that they need. The second includes creative control. Writing their emails or hopping on all of their calls is a waste of your time, their time and company time. Unless they specifically ask for help on the close or sales call, auditing every single call is not necessary and shows a lack experience, trust and overall self confidence. Once in a while is fine, but there is a thin line between micromanagement versus understanding numbers and performance. Keeping up an accurate as possible CRM will help you have the full disclosure on the steps of progression, so you dont need to manage. Third is the feeling of value and importance to the organization. If you do not feel like you are being treated with respect, you will most likely not give it back. Doing crappy unethical things like shorting employees on their commissions only hurts you in the long run as they will be looking to jump ship when quotas are not transparent and honest. Feeling secure in your job means transparency, honesty and respect for one’s self and others. And you need to give it to get it!

Here are 5 steps to help you create a fair sales compensation plan to help grow and build your team in a healthy, rewarding and resilient manner.

1. Keep the goals as simple and clear as possible, making 1 to 4 goals that are short and long term. Sticking to the plan is important, but also making it unachievable will invite them to either find another job or quit on the spot. It is demotivating to have an explosive number to hit, so if there is a big number make sure that you have the ability to hire the right amount of people to achieve your goals.

2. Give additional incentives to those that go above and beyond their numbers. For example, if the sales representative overshoots his quota by an extra 20%, he gets an additional 1% in commission. If he gets the client to pay upfront, he gets the commission sooner.

3. Understand what needs to be achieved and what does not. This means you can understand what clients you’ll need to get and predict how long it will take to close them.

4. Never ever implement cliffs. This means that if a sales person doesn’t hit a certain percentage of their quota, they get 0% commission. The whole drive to sell is the commission. If a person is working in sales, expect to give them a commission on everything they bring in if you want to keep them and save money on employee turnover.

5. Pay attention to the emotional quotient of your team. Ask them how they are doing, know who they are, where they are, and where they want to be, then support that growth by having lunch and learns or by providing training to get them to reach their professional goals.

What other important points do you use to support your sales compensation plans and how do you help the players reach their goals?

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