Question and answer format
In the non-commercial radio world, there is a role that is referred to as underwriting staff. They go out and solicit contributions from businesses for a mention on the air. It is basically sales in the non-profit broadcasting business. One station’s staff has always been salaried and now they are thinking of going to a commission structure.
My advice is to offer some variable pay, but move slowly. My guess is that you want a collaborative non-profit approach by your “underwriting staff,” not an aggressive sales-y approach. Their degree of aggressiveness and their level of effort may go up as you offer them incentives; but your ability to control them and their tendency to work collaboratively with their team and the rest of the company may go down. You also need to assume that you have people already in the role who chose it because they liked the reliable low-risk pay environment. Too much at-risk, and you could scare them away – which is OK if that’s what you want to do, and if you have the ability to re-fill those positions quickly.
So, that said, I would suggest that you move to a fixed dollar payout opportunity at target – same value for all of them – we’ll call that their bonus. Then set a goal in “underwriting” that they have to achieve to get it. Start paying some variable pay around 70% of goal (since it’s the first time you’ve set these goals), and offer 150% of the target at around 130% of goal. The payout should probably not be funded by reducing base salaries in the first year you do this, as that could also be scary. If you are already paying below market, you may have room to offer a bonus by paying a little more in total and putting the entire annual increase into the bonus. Even $5,000 in the first year will start to get things going and capture their attention. $10,000 would be better. And over the long run you are probably headed towards a pay mix that is about 60% to 70% base and 40% to 30% at-risk.
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.