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Tips for Proactively Engaging in the Sales Compensation Design Process

By: J. Mark Davis, Managing Principal, Valitus Group, Inc.

This is the time of year for leisurely barbecues, family vacations, and, in general, time away to recharge the old batteries. It's also the time of year to retool for the inevitable push through the sales compensation review and redesign process in preparation for the next fiscal year. In my sixteen years of consulting in the area of sales force effectiveness, I've heard many a complaint from HR and Compensation professionals about not having a sufficient opportunity to participate in and influence the sales compensation design process. Yes, it's true that sales compensation is often the domain of senior stakeholders from Sales and Finance. However, I've too often witnessed the HR/Comp contingent sitting in decision-making meetings during the sales compensation design process without making a contribution of any real value. It's no wonder they too often have no voice at the table!

Yes, sales compensation is different from the other all-employee compensation programs with which the typical Compensation professional is more familiar. It does take some specialized technical content knowledge. More important, it takes an understanding of the Sales function. To the complaining HR masses I say: "Know thy audience!" If you want to be invited to the table, you must be prepared to contribute - and that means investing time in getting to know as much as you can about your Sales function. Here are a few practical ideas for how to get up to speed on the sales force so you're able to be a valued partner around all aspects of designing and managing the sales compensation system:

1. Leverage internal resources. The key here is to proactively engage with the sales force. The VP of Sales may be more willing to view you as a valued partner if you understand their issues and needs. Consider the following activities:
1. Conduct interviews with members of Sales leadership down to front-line sales reps to understand their key issues and how you might add value
2. Go on "ride-alongs" to better appreciate the nature of the various sales roles within the context of the sales process
3. Become conversant in the breadth of the your company's product/service offering
4. Attend local sales team meetings
5. Attend an internal sales training class with the sales team
6. Review and understand the details of the current sales compensation plans
7. Analyze historical pay and performance data (reference April newsletter/article)
8. Spend time with the individuals who administer the plan to understand their perspective on what is and what isn't working well
   
   
2. Build your library and read! I'm talking about being in major sponge mode here. And, no, sleeping with that book under your pillow won't work either (I've tried it). Here are a few suggestions:
1. Check out your senior Sales executives' book shelves. Read what they're reading. This may give you insight into what's influencing your leadership team's management style as well as their sales compensation philosophy
2. Read some sales compensation-related books. Pardon the self-promotion, but you may want to start with The Sales Compensation Handbook - Second Edition (published by AMACOM) to which I contributed four chapters. Another good book is the recent offering on the subject: Sales Compensation Essentials (published by WorldatWork) by Colletti, Fiss, Briggs, and Sands
   
   
3. Subscribe to relevant periodicals and trade magazines. The following suggestions may be a good start:
1. Selling Power
2. Sales & Marketing Management
3. Sales Management Report
4. Sales & Service Excellence
5. WorldatWork's publications, Workspan and WorldatWork Journal
6. Trade publications specific to your industry
7. This newsletter!
   
   
4. Enroll in a sales compensation training course.
1. WorldatWork's Cert. 5, Elements of Sales Compensation
2. WorldatWork's Sales Compensation for Complex Selling Models (more shameless self promotion - I teach this one!)
3. Courses offered periodically through SHRM (Society for Human Resource Management) or other local HR organizations
   
   

In short, there are many ways to better position yourself to actively contribute to the sales compensation discussion in your organization. The fact is the HR function should have a voice at the table. Don't squander what few opportunities you may have to demonstrate your value. It's up to you to invest in your own learning and development. So stop whining and take action!