Compensation Plans for Top Performers

Compensation Plans for Top Performers

Compensation plays a key role in motivating A players.

A well-structured compensation plan aligns with company culture and sales priorities, and ensures simplicity and effectiveness in driving sales force performance across territories and products.

And ultimately hinges on clear and attainable financial incentives.


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Compensation

By Steven Dietch


What the Idea Is: To your “A” players, even though it’s more than money (it’s also the challenge and the camaraderie), what it really comes down to is how they are paid. They want to know if they made quota and if they are making President’s Club.


Why It Is Valuable: It creates a clear line from the products to the compensation plan, and it’s simple for the sales person to understand and excel.


How It Works: Culture is important; you have to design your compensation plan within the framework of your company. The easier and more understandable you can make the simplicity of a sales plan and use that to direct energy, the better it can be.

When you have a leverageable sales force across several regions selling fifty products, how do you create a compensation plan that incentivizes people to execute? You need to keep it simple, with just two to three components.

The most important component is that the enterprise needs to figure out what its sales priorities are; it cannot be everything. Make it what it needs to be, with one or two components that are needed to meet goals, then add a new component that needs to help something grow really fast. You can use a carrot or a stick, or both.

You will know it is working if your organization has met its revenue and margin goals and if you meet your quota achieving distribution. It acts as a sort of bell curve; what is the optimal number of reps who need to make quota? Did you set them up for success?


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Great insights! It's important to remember that core performers are the true backbone of a sales team. Considering them is crucial, but it can significantly complicate your compensation plan. If only there were a logic-based platform to streamline creating compensation plans...

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What key factors do you prioritize when designing such plans, Randy Seidl?

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Allen Johnston

K2View - Energetic Leader Focused on Innovation, Business Transformation, Collaboration and Team Success

9 个月

Randy great topic. A well-structured plan is key in the success of organizations. Creating alignment and ensuring the operational expense curve can support a compensation plan that retains top-performers is essential to create velocity and sustain competitive advantage.

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