{"id":2017,"date":"2016-02-15T18:48:08","date_gmt":"2016-02-15T23:48:08","guid":{"rendered":"http:\/\/www.alighaemi.com\/wp\/?p=2017"},"modified":"2016-02-15T23:43:57","modified_gmt":"2016-02-16T04:43:57","slug":"year-over-year-compensation-increases-and-variables","status":"publish","type":"post","link":"https:\/\/www.alighaemi.com\/wp\/?p=2017","title":{"rendered":"Year Over Year Compensation Increases And Variables"},"content":{"rendered":"<p>Sometimes it is a wonder how easily a percentage of\u00a0sales management professionals\u00a0forget or never learnt\u00a0the fundamentals of sales <a href=\"http:\/\/www.alighaemi.com\/wp\/?p=665\">compensation <\/a>and motivation.<\/p>\n<p>This is not a knock against the vital and, if the job is being done correctly, difficult sales management position. However, for different reasons sales managers act counterproductively to the desired outcome\u00a0when it comes time to set goals and define compensation plans.<\/p>\n<p><a href=\"http:\/\/www.alighaemi.com\/wp\/?attachment_id=2020\" rel=\"attachment wp-att-2020\"><img decoding=\"async\" loading=\"lazy\" class=\"alignleft size-medium wp-image-2020\" src=\"http:\/\/www.alighaemi.com\/wp\/wp-content\/uploads\/money-bag-234x300.jpg\" alt=\"money bag\" width=\"234\" height=\"300\" srcset=\"https:\/\/www.alighaemi.com\/wp\/wp-content\/uploads\/money-bag-234x300.jpg 234w, https:\/\/www.alighaemi.com\/wp\/wp-content\/uploads\/money-bag.jpg 312w\" sizes=\"(max-width: 234px) 100vw, 234px\" \/><\/a><\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>Reasons may include:<\/p>\n<ul>\n<li>Sales managers\u00a0forget what being in a sales\u00a0(individual contributor) position was like.<\/li>\n<li>Sales manager was never in a direct sales position.<\/li>\n<li>Sales manager is junior and has not found his or her rationale or voice. This person would go with flow and not make waves.<\/li>\n<li>The sales\u00a0compensation model is of course derived from the company&#8217;s strategic plan for the year and is handed down from the office of the Chief Financial Officer and, by extension, board of directors. The sales chain of command was unable to wholly or partly contribute to the puzzle.<\/li>\n<\/ul>\n<p><a href=\"http:\/\/www.alighaemi.com\/wp\/?attachment_id=2021\" rel=\"attachment wp-att-2021\"><img decoding=\"async\" loading=\"lazy\" class=\"alignleft size-full wp-image-2021\" src=\"http:\/\/www.alighaemi.com\/wp\/wp-content\/uploads\/chart.gif\" alt=\"chart\" width=\"248\" height=\"207\" \/><\/a><\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>Here are\u00a0examples of what I term counterproductive sales compensation modelling. Before doing that though let us remember that we are not dealing in absolutes. This is not a black and white edict. A compensation plan could very well lie on a spectrum between &#8216;good&#8217; and the &#8216;bad.&#8217;<\/p>\n<p>Sales professionals are often vocal, and correctly so, with sales compensations when:<\/p>\n<ul>\n<li>The numbers are not what the company has in fact budgeted. By the time the sales manager has adds his 5%, the director had added her 10%\u00a0and the vice-president has tacked on a discretionary 5% the number has ballooned by 20% and is demotivating the sales team. With the team finding the number out of reach sales people\u00a0react in several ways. They\u00a0check out\u00a0when concluding that the target is not realistic. Worse, they become resentful\u00a0believing the cards are stacked against them. Moreover, when facing a tough market and competitive landscape sales comes to fret a lack of\u00a0friendly cover. You might be thinking how would the team know (that the numbers have been altered)? It is not the absolute number that poses a challenge, but the delta between numbers and the path to achieving it.<\/li>\n<li>Sales numbers are based on one-offs or\u00a0special circumstances. If a salesperson who happened to walk into a large sale or had a\u00a0major sale based on a special circumstance that is not repeatable finds the new quota follow the\u00a0(FY -1 Special Circumstance * FY0 Uplift%) formula he\u00a0is likely to balk at the number calling it irrational along the way.<\/li>\n<li>Similarly, salespersons with spectacular achievements are given congruently higher quota than counterparts based on last year&#8217;s success. The message is &#8216;Thou Shalt Be Punished For Thine Hard Work.&#8217; Looked at conversely weaker salespeople were rewarded.<\/li>\n<li>Under adverse circumstances, salespeople hold back &#8211; it even has its own term &#8216;sand bag&#8217; &#8211; possible sales from one quarter to the next or worse from fiscal year to the next. Forget helping salespersons over-achieve; under such circumstances sales is actively not achieving.<\/li>\n<\/ul>\n<p>It is important to not create sales compensation in isolation from the very salespeople who are tasked to execute it. It is also critical that salespersons do not be handed a disincentive and be demotivated by sales management and their compensation plans. Most importantly, managers must examine the compensation plan to eliminate any perceived or actual unfairness. Operating in an environment\u00a0that is not a level playing field will\u00a0have the opposite of the intended effect\u00a0and lead to charges of favouritism or unprofessionalism.<\/p>\n<p>Keep\u00a0the numbers above board, uniformly\u00a0applied and view the sales team\u00a0as mature allies.<\/p>\n<p><em>*Things That Need To Go Away:\u00a0not soliciting the sales team&#8217;s feedback on the sales compensation model or, worse, soliciting and subsequently ignoring it.<\/em><\/p>\n<p><a href=\"http:\/\/www.alighaemi.com\/wp\/?attachment_id=2022\" rel=\"attachment wp-att-2022\"><img decoding=\"async\" loading=\"lazy\" class=\"alignleft size-medium wp-image-2022\" src=\"http:\/\/www.alighaemi.com\/wp\/wp-content\/uploads\/bonus-257x300.jpg\" alt=\"bonus\" width=\"257\" height=\"300\" srcset=\"https:\/\/www.alighaemi.com\/wp\/wp-content\/uploads\/bonus-257x300.jpg 257w, https:\/\/www.alighaemi.com\/wp\/wp-content\/uploads\/bonus.jpg 321w\" sizes=\"(max-width: 257px) 100vw, 257px\" \/><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Sometimes it is a wonder how easily a percentage of\u00a0sales management professionals\u00a0forget or never learnt\u00a0the fundamentals of sales compensation and motivation. This is not a knock against the vital and, if the job is being done correctly, difficult sales management position. However, for different reasons sales managers act counterproductively to the desired outcome\u00a0when it comes <a href='https:\/\/www.alighaemi.com\/wp\/?p=2017' class='excerpt-more'>[&#8230;]<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":""},"categories":[3,7,1],"tags":[173,175,176,171,172,174],"aioseo_notices":[],"modified_by":"Ali Ghaemi","_links":{"self":[{"href":"https:\/\/www.alighaemi.com\/wp\/index.php?rest_route=\/wp\/v2\/posts\/2017"}],"collection":[{"href":"https:\/\/www.alighaemi.com\/wp\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.alighaemi.com\/wp\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.alighaemi.com\/wp\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.alighaemi.com\/wp\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2017"}],"version-history":[{"count":0,"href":"https:\/\/www.alighaemi.com\/wp\/index.php?rest_route=\/wp\/v2\/posts\/2017\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.alighaemi.com\/wp\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2017"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.alighaemi.com\/wp\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2017"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.alighaemi.com\/wp\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2017"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}