McAnally is president of SalesComp America, in Andover, Massachusetts.
Killer #7. Design Comp Plans That Don’t Match Company Goals
[Go here for mistakes 1 to 6.]
Nobody’s going to be happy with the sales force if compensation plans don’t match up with company goals. Say you’re trying to launch a new product that is much more profitable than existing products, but harder to sell. If your comp plan doesn’t incent your salespeople to push the new product, they never will.
Killer #8. Make Plans Really Complicated
Here’s another common mistake: Plans need to be simple enough that salespeople can predict reasonably well what their earnings will be. Sure, there will be some adjustments. However, plans that are so complicated that no one but a CPA can figure them out are just going to confound salespeople and turn them off.
Don’t trust national salary data when you can have data specifically for your state and region. Find state data on hundreds of jobs in BLR‘s famed Employee Compensation in [Your State] program.
Killer #9. Reward New and Existing Business in the Same Way
Existing clients are the easiest source for sales, but few businesses can survive without attracting new customers. Yet many organizations reward new sales the same way they reward sales to existing customers. If new business is important to your organization, reward new accounts more generously than existing ones, says McAnally.
No doubt, sales comp is challenging. Of course, as comp pros know, all compensation decisions are challenging. If you don’t pay enough, you’ll never get the people and productivity you need, but on the other hand, if you pay too much, it’s bye-bye profits.
The challenge is complicated further by factoring in other variables—where you’re located, what the law says, what your competitors are paying— not to mention internal equity issues. How do you figure it all out? Where do you get good data?
A Program to Avoid Compensation Miscues
Our editors recommend a classic BLR program, used by thousands of companies for more than 20 years: Employee Compensation in [Your State]. The [Your State] refers to the fact that a separate edition is published for each of 43 U.S. states, plus the District of Columbia. So if you work in Illinois, Employee Compensation in Illinois is the reference you will receive.
Each edition of the Employee Compensation in [Your State] service contains these key elements:
—Recommended rate ranges localized for your state and region for hundreds of jobs, based on surveys and official data. You shouldn’t pay the same in Manhattan, Kansas, as you do on Manhattan Island in New York. This program makes sure you don’t.
What are your competitors offering workers these days? Check your state’s edition of BLR‘s exclusive Employee Compensation in [Your State] program to find out. Try it at no cost or risk.
—A to Z state and federal law comparisons. Comp and benefits are regulated by a tangle of laws. Employee Compensation offers an alphabetically arranged set of practical analyses on how to comply. Look up “ERISA” or “Overtime” or “Workers’ Compensation” and you instantly have a plain-English explanation of how the controlling laws—state and federal—apply to you.
—A full job descriptions program. Employee Compensation offers a complete tutorial for setting up a job descriptions program. Many ADA-compliant sample descriptions are provided, ready to copy and use.
—Employee compensation and benefits surveys. BLR‘s exclusive survey data come from thousands of organizations just like yours. You get exempt compensation, nonexempt compensation, and pay budget and employee benefits survey results.
—Free newsletter and updates. The Employee Compensation newsletter helps keep you on top of new state and federal compensation and benefits laws. Six updates throughout the year keep your book current with all new compensation laws.
—Complete wage and salary administration guidance. Walks you through the entire compensation process with step-by-step instructions for analyzing and pricing jobs, writing job descriptions, employee compensation policies, and more.
Use the links below to see samples of the program and newsletter, as well as a full table of contents of what’s included.
The program is priced affordably for small companies as well as large, at about $1.50 a working day. That’s coffee money for just about every form of information most managers need to run a competitive and efficient comp/benefits program.
You can check out the entire program in your own office for up to 30 days, with no need to buy. (We even pay return postage.) Just click the link below, and we’ll be happy to set things up.
Start a no-obligation free trial
Download product sample
Download sample newsletter
Download Table of Contents