There are an increasing number of compensation plans and sales strategies that organizations can use to improve their operations. These techniques include offering incentive pay for a job well done or providing other benefits that employees prefer. Creating transparency and ease of use for reward programs is essential for businesses to get the maximum number of people making use of the system, thereby creating return on planning and deployment investments.
Targeting incentive issues
However, there can be issues with long-term compensation strategies that organizations need to look out for, as these pitfalls can significantly hinder adoption and engagement among employees regarding compensation strategies. Businesses must be sure to check with their staff members on a regular basis to ensure that they have everyone onboard with compensation ideas and that everyone is happy with what the company has to offer.
As Dark Reading stated, it's not uncommon for corporations to foster sales incentive compensation programs that don't offer the right kind of feedback. The source pointed out that, if some individuals fail to see any kind of feedback on a daily basis, they may begin to erode their interest in compensation plans. This is why transparency is so vital to the success of these initiatives – while long-term incentive compensation is in itself a good idea, there need to be ways for individuals to track progress, learn about goals and change their strategies based on the kinds of rewards they want to earn.
Offering the right rewards
It also helps to offer employees optionable sales criteria so that they can more easily obtain rewards. Sometimes offering a lesser incentive for hitting basic goals gives sales staff more impetus for striving for higher aims. Businesses need to ensure that they are offering their staff members awards that they actually want to obtain. Companies need to create a balance between the value they set for their compensation assets and the total effort employees need to expend in order to earn these rewards.
Some people in the organization may be earning more incentives and putting out more effort than others if there is an uneven distribution of reward potential. For instance, CFO Online wrote that some CFOs are earning significantly more than those with higher-ranking positions. A study by Compensation Advisory Partners showed that financial officers are seeing improvements in income while executives are earning less. It may be that these organizations need to adjust their compensation strategies so that all of their employees have an equal chance to earn more.