Beyond the Easy Solutions of Sales Compensation Tinkering

When sales force performance does not meet expectations, most worried executives conclude that the sales compensation plan is at fault. Eager to do something, they tinker with the plan, hoping to hit on something that will get sales back on track.

Their reaction seems reasonable. After all, most plans fail - eventually. The problem is that it is tempting to pounce on the sales compensation plan before looking for other causes for the disappointing sales results.

Why do so many bright executives rush headlong into possible misjudgment? Because sales incentive compensation is:

  1. a highly visible mainspring for motivation
  2. quantifiable
  3. easily manipulated
  4. safer to confront than other, possibly deeper, reasons for declining revenues, shrinking market share and other problems.

Getting at root causes is never easy. One needs to ask the right questions of the right people under the right circumstances - and to do an objective and thorough job of analyzing the findings. In-depth field interviews (one-on-one and in focus groups), skillfully conducted, with assurances of confidentiality, uncover barriers to motivation and sales success.

Often, management prevents such exploration. Their objections include:

  1. distrust in what the field salespeople
  2. discomfort in stirring-up the
  3. fear of generating unrealistic goals
  4. concern about added project costs

These formidable barriers may be insurmountable - paving the way to yet another go at the plan.

Successful sales motivation programs (including but not limited to incentive plans) begin with the commitment of top management to operate in the real world by openly confronting and removing obstacles to motivation and top performance.