Representatives won’t be satisfied with stagnant sales incentives and compensation for much longer. The job market has steadily improved in recent months, and now employees are starting to look around for lucrative opportunities. Brian Kropp, a managing director from an advisory firm, says that most workers want increased compensation for their services in 2013.
“Employees are becoming empowered. They may have accepted wage freezes for the past few years, but they’re going to begin to ask – or look elsewhere,” Kropp told Forbes.
Managers must develop sufficient compensation solutions to retain their best agents. Businesses should consider their long-term finances before they increase incentives or offer raises to employees.
One of the simplest strategies for increasing compensation is using a department-wide wage scale. Every representative will receive the same percentage increase to their regular earnings. The universal wage scale ensures that every employee earns a higher income. According to Mindflash, a training company, the average raise is 3 percent.
Additionally, the strategy eliminates possible complaints about favoritism. Sales performance management (SPM) is a difficult task to handle and supervisors are under constant scrutiny from their employees. Agents could look for new employment opportunities if they feel that their supervisors favor certain staff members, and perceived favoritism can be devastating to overall workplace satisfaction.
Link pay to performance
The downside to department-wide wage increases is that top performers feel slighted when they receive the same raise as mid-level employees. Salespeople take pride in their work and are hurt when their managers don’t recognize consistently excellent efforts.
Managers can treat raises like incentives to motivate their representatives. Agents will strive to hit benchmarks if they know there is more to gain than one-time bonuses. The system also allows employees to track their numbers to see how close they are to earning their raises.
Offer new and more frequent bonuses
It’s not financially feasible for some companies to distribute raises to all of their employees. The economy as a whole is recovering, but some businesses still aren’t on solid financial footing. Unfortunately, representatives aren’t necessarily sympathetic to their employer’s plight – they want fair compensation for their work.
Mindflash reports that some companies that can’t afford to cover permanent wage increases offer more bonuses to keep their employees satisfied. Vendors can lower their sales quotas so that agents can earn more frequent rewards than usual. The increased number of commissions ensure that representatives are happy with their compensation and motivated to sell more goods or services.