Incentive compensation is the additional money sales reps receive on top of their regular basic salary. They can vary, but typically, sales reps earn such bonuses after closing a sales deal. Here are three steps to improve your incentive plans and make them a success.
Determine Participants
Keep in mind that missing a vital position or employee can jeopardize the entire plan. That’s why you need to consider more inclusion than exclusion. Incentive compensation motivates your employees to do the right things.
If you seclude a group of your employees from an incentive, don’t be surprised when they don’t achieve a particular goal. It’s only human nature, so your employees will prioritize things that benefit their self-interest the most.
Develop Clear Performance Goals
These should be simple and quantifiable. The fewer, the better, so think of two to three goals. Modeling the potential payouts helps you efficiently manage the plan.
As you develop your goals, it also helps to be realistic. Prepare yourself to reward incremental improvements, not just the home runs.
Rinse and Repeat
Evaluate the failures and success of the plan. Determine what you can easily modify or improve for better results. Also, remember to check payouts against modeling that took place earlier for accuracy and variations.
Don’t merely rely on consultants’ proficiency. Ensure it passes your test, and everything is correctly in play, on both the payout side and the incentive target side
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Call the Expert
CompXL can help your business reach greater heights. Besides being affordable, it’s the most flexible compensation management software out there.
