Fixing the sales incentive compensation equation

Giving people what they deserve takes on many guises, depending on what jobs they hold and the performances they provide. In some cases, top talent may be getting short-changed while underachievers receive more than they're worth. There need to be compensation plans in place with transparent guidelines and plenty of oversight so that employees know what they're getting and why, and so do managers.

Addressing past issues at present
The rise of business intelligence and metric analytics should have given way to more intuitive compensation strategies, but they didn't. As Modern Distribution Management pointed out, the problems of incentive organization that existed a decade ago are only getting worse today.

Much of the error here lies in how companies calculate the total compensation each individual is meant to receive, basing these outcomes on outmoded methods of determining value by overall revenue. Instead, MDM stated it's best to think of different ways to value what an employee is doing. Rather than simply looking at the scenario as how much money the staff member earned for the business or what a single sale nets the company, it's better to think of it as the amount of effort and skill it took to close the deal.

Reducing adoption issues
It's important for these reasons that companies are also open to reviewing and refreshing their compensation plans. In some cases, a firm may feel its reward strategy is satisfactory, though it still fails to yield the kind of return on investment that it was hoping for at the onset. This could mean that the award amounts aren't high enough, that talent management software isn't providing the right feedback or personnel just aren't interested in what the business is offering in the form of bonuses.

"Traditional compensation plans don't work," CRN quoted incentive expert Kristin Rogers. "Sales behavior and sales compensation are big issues for [solution providers] right now."

In order to bridge this gap, CRN Technology News wrote that it's essential for firms to consider new incentive compensation solutions that step outside the box and offer more flexible, custom options. Tackling the entire sales experience and tailoring compensation systems to match the effort every team member puts out to make a deal come through helps give everyone a chance at a bonus, but advanced business analytics must be utilized in determining how to reward people.