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Communicating the comp plan

This year, communicate to your team that the sales compensation program is an important, strategy-driving device.

5 min read


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Imagine you’re sitting in a lecture hall — one of the big ones from college — listening to your manager address such fascinating topics as numbers, more numbers, some statistics, some percentage points, and more numbers.

Are you still awake?

Neither is your sales team.

The sales compensation plan is not only one of the single biggest line-item expenses a company has year after year, it’s also time consuming and expensive to create. Sales leaders and sales operations spend months analyzing past performances, studying the new sales strategy and crafting an incentive plan that drives the behavior your company needs to grow revenue. It’s no small task.

So why, after all of this toil and trouble, are sales compensation plans so poorly communicated? Most often, sales teams either receive an email announcing a new plan with the complicated plan documents attached, or they listen to specifics in a lecture environment that isn’t conducive to asking questions.

Instead, consider a detailed communications plan that treats the sales compensation program as the important, strategy-driving device that it is. To begin with, put yourself in the shoes of the sales organization — concerned with their livelihood and any possible disruption — and develop your change plan to drive the strategy with the sales team in mind. When making your next change, consider the following six steps:

  1. Start strong. Conduct your due diligence to make sure the program is bulletproof and ready to go. Bring together not only executive stakeholders, but also highly regarded representatives from the field who have a tactical operating view on the business. These opinion leaders can provide valuable input and help communicate the right messages to their peers.
  2. Craft the change story. Be honest about the reasons for the change and develop a clear message around the C-level goals. Usually, the organization will make a plan adjustment if there is a change in sales strategy, a change in how the organization goes to market with its sales resources and sales process, a need to respond to a competitive situation, or if the plan simply isn’t doing what the organization intended and needs some adjustment or redesign.
  3. See the organization’s view. Assume that most people will see any change as potentially negative. This is particularly true when it comes to compensation. From a sales organization view, unless the current compensation plan is a complete disaster, they often assume the only reason to change the plan is to manage pay or improve the company’s financial position. Resistance also comes from reluctance to alter routines. If the new incentive plan steers the organization toward new products or perhaps selling to new customers beyond their current accounts, that can be uncomfortable.
  4. Get the change forecast. Know your organization’s readiness for the change and your team’s resolve to see it through. Most executives we work with can make a general statement about their culture’s comfort with change. We recommend erring on the side of considering a change a major event rather than minor, as it’s always safer to overcommunicate.
  5. Leverage the learning modes. Use multiple methods to communicate with the organization to increase the impact of your message. As proposed in the “Theory of Multiple Intelligences” by Harvard psychologist and professor of education Howard Gardner, there are at least seven modes you can leverage using a range of communications vehicles. Here are examples of some of the learning modes and how you might use them with the sales compensation plan.
    • Linguistic learners capture information through language, both in writing and orally.
    • Logical-mathematical learners have the ability to see relationships between objects and solve analytical problems.
    • Visual learners have high visual intelligence and can translate information easily to and from images and pictures.
    • Kinesthetic learners absorb new information through touch, manipulation, and movement. For the compensation plan, leverage demonstrations and role plays of how the plan works.
    • Musical learners recognize tones, rhythms, and musical patterns and can often remember and repeat a melody after listening it to once.
    • Interpersonal learners connect with people, have the ability to influence people, and are often natural leaders.
    • Intrapersonal learners are keenly aware of their strengths and weaknesses and have great self-discipline. They sometimes prefer to study individually.
  6. Follow the process. Begin communication early and follow your approach until well after introduction.

As you’ve worked through the steps of starting strong, crafting your change story, seeing the organization’s view, and getting the change forecast, you’ve covered a number of major steps in the change process. Use a regular flow of inbound and outbound communication between the leadership team and the sales organization. The sales comp plan is worth it.

Mark Donnolo is managing partner of SalesGlobe, a leading sales effectiveness consulting firm. Over the past 25 years, he has worked with IBM, Comcast, AT&T, Office Depot, KPMG, LexisNexis, Accenture and Verizon, among many Fortune 1000 companies. He is the author of two books on the subject: “The Innovative Sale: Unleash Your Creativity for Better Customer Solutions and Extraordinary Results” and “What Your CEO Needs to Know About Sales Compensation.” Connect with him on LinkedIn.

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