So just to summarize your previous company history, you have given base salary increases to recognize the coaching responsibility in the past, however, going forward, the duty will be held on a 1-year rotational assignment rather than an on-going responsibility, so you are seeking an appropriate alternative.
First of all, you are wise to avoid adding permanently to the base salary in recognition of a transient responsibility. My suggestion is to provide a separate incentive compensation opportunity based on the sales results of the person being coached. It should probably be about 20% of their total incentive opportunity if you want them to maintain focus on their primary individual selling job. And it should be structured simply. For example, earn 50% of the target incentive if the “coachee” is at least 80% of quota, 75% at 90%, 100% at 100%, 125% at 110%, 150% at 120% or better. I’m not at all sure the performance range here (80% to 120%) is right for your business – so you should adjust those depending on the aggressiveness of your quotas and the predictability of your business.
The next question is whether or not the coaching incentive opportunity should be in addition to their regular comp plan or carved out of it. If they receive a reduced personal quota in recognition of the time they will need to spend on this, there is an argument for a carve-out (reducing their regular comp plan incentive at target to offset the coaching incentive). But more likely they are top performers with typical/healthy quotas, and this is an added responsibility. If this is the case, then the incentive opportunity should be in addition to the regular variable pay plan.
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.