Getting Aligned

There are many programs and options and understanding these options will reduce the chances of creating an ineffective program by having too narrow a perspective.

If after assessing the alignment of your company's existing sales compensation programs and your company's strategic objectives you conclude that enough misalignment exists to warrant changes, the next step is establishing a necessary level of clarity on redesign objectives.

Many companies make the mistake of jumping straight to the Excel spreadsheets and playing with formulas.  This is incorrect for two reasons: first, most companies do not have a manager of sales compensation design.  As a result, most companies that jump straight to "tweaking the commission formal" do not have enough exposure to the breadth of sales compensation structures or mechanisms that exist.   There are many programs and options and understanding these options will reduce the chances of creating an ineffective program by having too narrow a perspective.

ACTION POINT: Consider alternate approaches to compensation.