As you may imagine, this is a scenario we see with some frequency. We call these the bring-your-whistle engagements because we often find ourselves in the role of referee among confident, successful leaders who are all quite sure they have the right approach, who have plenty of anecdotal “evidence” that it works, and who don’t agree among themselves. In these situations, we find that aligning the plans is most successful when:
- There’s a leader over all these folks who is willing to require that they come to a consistent approach so that “agreeing to disagree” is not an option.
- The legacy company sales leaders have a chance to voice their beliefs and stories, their priorities and boundaries, their concerns and fears before the work begins in earnest. They need to be heard, and the real wisdom they have gained in their former companies needs to be tapped.
- The Design Team is formed to include all those stakeholders, business leaders or sales leaders from the legacy company. If someone claims he/she is too busy for this, and that they’ll give their input up front and then help when the designs are closer to final later, that is probably not a good idea. The alignment and struggle with the challenges of building a consistent set of plans is a valuable part of the change management, and no legacy organization should be allowed to decline to participate Even if they agree to accept and abide by the decisions of the Design Team, they will not be able to articulate the rationale and support those decisions if they haven’t been part of the process.
- The historical pay and performance data are collected and reviewed carefully to develop a shared understanding of how people have been paid in recent years, sources of dispersion in pay, goal attainment distributions, and differences among legacy sales organizations. Perceptions are often tainted by the outlier stories we remember. The data will tell the whole story.
- The Design Team has a clear shared understanding of the sales roles for which they are designing, and they have come to agreement on this. (If not, then the organization and job design effort should precede the comp design effort.)
- The Design Team is grounded in the principles and best practices of sales compensation plan design. This doesn’t mean they all need to go take the WorldatWork C5 class – a good robust discussion of principles can usually be completed in about 2-3 hours, and include a fair amount of sharing of perspectives as well.
- The process then proceeds through the logical steps of compensation design (role definition –> pay structure –> incentive measure selection –> incentive mechanic design –> modeling and testing –> final plan design approval –> communication and administration). And all of this is built on the strong foundation of the principles. Try to keep the focus on principles and facts rather than beliefs and anecdotes.
- The Design Team then leads the rollout, sharing the rationale and “selling” the new plans to the sales people.
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.