How To Start & Grow Your Business

Set Sales Compensation to Motivate Results

From the Editor's Desk
Jan 22nd, 2015
  • Estimated reading time: 1 min read
  • Hummy's
    Highlights

    1"The compensation plan doubles as a job description." 2Salespeople should benefit when target reached. 3Compensating well doesn't hurt when done right.
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Sales Misc.

Alarm clock and calendar Photo Credit: Africa Studio Shutterstock

Payday for your sales staff can be a day of celebration, if the compensation plan is in alignment with performance objectives, says Lee Salz, contributor to The Business Journals. Otherwise, writing those checks might hurt.“If you aren’t thrilled to pay the salespeople, take a close look at the structure of your compensation plan,” Salz writes.

He says that ideally, your salesperson’s compensation plan is practically a job description. Very simply, when their job is done, they are paid. When this is the case, paying them generously shouldn’t sting.

“What quota?”

On the other hand, when the pay is too loosely related to the job description, motivation wanes. He says that managers whose staff don’t perform satisfactorily know exactly what quota their sales staff should be hitting, yet the salespeople themselves can’t tell you what that number is.

 Motivation

“If you are going to give your salespeople revenue targets, those have to be tied to the dollars paid to them — if you want quota ownership,” Salz emphasizes. He adds that bonuses and contests can be great motivators as well.

Bottom Line

Overall, Salz recommends looking more closely at the design of your compensation plan and making the needed adjustments. When the act of paying your salespeople becomes truly fun, you’ll know you’ve gotten it right.

To read the original article in its entirety please visit The Business Journals.

About the Author

From the Editor's Desk

This article was written by a bizHUMM Staff Writer. We aim to provide practical tips that help solve your burning small business questions. If you have any suggestions or ideas for articles, please email them to: editor@bizhumm.com