Most businesses change their sales compensation plan a bit on an annual basis, tuning rates, adjusting goals, possibly adding linkages or adjusting crediting rules. There is value in keeping the basic framework stable as long as it is serving the business well.
However, sales compensation is role-based compensation, meaning that it is carefully designed to reward sales people for achieving the results the business needs.Given the fact that the needs of the business change over time, it is unlikely that the basic plan framework will remain appropriate over a span of many years. For this reason, most businesses make structural changes to their plans every three to five years.
Donya Rose, CSCP, is Managing Principal of The Cygnal Group. She is a recognized expert in sales compensation plan design, regularly speaking at conferences and writing published articles. She serves clients from F500 to growth-stage businesses, and advises WorldatWork on sales compensation hot topics and best practices.