With little understanding of the extent and duration of the unfolding situation, how should sales compensation plans be adjusted, and when?
This is a common question, especially for smaller companies, whose resources are limited. It’s certainly understandable for a manager to want to develop an incentive plan that only pays out of the company profits (if there are any).
Sales Compensation Focus, July 2010 – The economy appears to have taken a positive turn and many companies are starting to think about growth: hiring more sales reps, launching a new product, or breaking into a new market segment. One of the first questions that is raised when a company returns to growth mode, especially if there has been significant retrenching, is, “What should we do with our sales compensation plans?”
Start by thinking about sales prominence. Has it changed? Do the sales people have more control over their own success, or less?
From our experience, I would say that most companies are making some kind of adjustment due to the economy. If your expected total sales are down, you have several options that we’ve seen recently…