Return to Article Archive  |  E-Mail Page  |  Print Friendly Page

Make Sure to Integrate Them Without Creating a Permanent, One-Off Pay Deal!

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

I had the pleasure of participating in a panel discussion at an industry conference recently where our topic was "Driving Sales Performance through Activity Metrics, Compensation and Incentive Plans." After my brief presentation, the moderator opened the forum to questions from the audience, one of which resulted in a consensus head nodding: "How do I hire a 'big gun' sales rep who requires special (read: above-norm) pay considerations without creating a permanent one-off deal?" Great question! Here are a few tips for integrating that gun slinger into the prevailing sales compensation plan for the role:

• Clearly set expectations by communicating what is the core compensation plan for the role versus any special pay consideration that will terminate over time


• Create some type of temporary "bridge" compensation arrangement:


• A one-time signing bonus to cover any anticipated decrease in salary or short-term loss of incentive earnings owing to the transition


• A non-coverable draw for a limited and defined period to allow them time to ramp up in their new role. Limit the draw to a reasonable time frame, considering, among other things, the length of the sales cycle


• A guaranteed incentive earnings amount for a finite period of time, with the ability to earn over and above the guarantee on the basis of performance


• Modify the pay statement to list any temporary compensation arrangement as a separate line item. For example, list the non-recoverable draw separate from the base salary, or annotate the guaranteed incentive separately from any earned incentive. They need to see these temporary pay considerations separately to reinforce the fact that it is just that - temporary!


• Continue to reinforce what is special compensation, reflecting their value to the organization, and what comprises the core sales compensation program to which they are transitioning. Don't let that pay statement speak for itself.

You're likely spending considerable time and money to attract this revenue-producing talent into the organization. Don't let an ill-planned pay transition strategy waste the opportunity.