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Aligning Diverse Sales Management Cultures through a Common Sales Compensation Philosophy

At WorldatWork’s recent Spotlight on Sales Compensation conference (Chicago; September 9-11, 2013), Jerry Colletti led a panel discussion on this topic.  The panelist were:  Katie Donohue, Sr. Director, Global Compensation and Sales Compensation Strategy, Medtronic, Inc.; Kerry Heiss, Director, Sales Operations, StandardAero; and Lisa Soderquist, Vice President, Human Resources, Allergan, Inc.

The panel discussion centered on:

  • A brief overview of sales compensation philosophy best practices that contribute to a solid cultural foundation about sales compensation decision making
  • Insight into how these three companies used sales compensation philosophy and guiding principles to align their business executives and sales leaders around how to structure, manage and assess sales compensation plans for optimal enterprise success
  • How to respond to issues business general managers and sales executives raise when an initiative to implement an enterprise sales compensation philosophy is desired by the CEO and/or other C-level executives

A lively discussion between the panelists and the session participants resulted in the following conclusions:

  • The granularity of a company’s philosophy and guiding principles is based on the company’s organization culture, business objectives and degree of difference across its BUs.
  • Inclusive development (of philosophy and guiding principles) is needed to ensure senior leadership and sales management acceptance; this is important contributing to sales compensation knowledge sharing across the enterprise which demonstrates value.
  • Specific guidelines should be developed to address specific issues, e.g., determining right mix by job/job family, how to use SPIFFs, how to assess plans consistently across BUs, world region geographies.
  • Global regions’ regulations and practices must be addressed through a defined process; and accountability for communication with work councils/labor unions must be clearly assigned to those in positions to best represent the company at local levels.
  • Sales executives and business general managers need to own the philosophy and guiding principles so that it is clear that they embrace and understand them and, can enthusiastically communicate them.

To view a copy of the slides that guided this panel discussion go to:  http://tinyurl.com/lgxxoed