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Gaining Sales Force Feedback on a New Sales Compensation Plan: Techniques and Types of Issues to Resolve
A recent WorldatWork Sales Compensation Focus article (5 Steps for Communicating Your New Sales Comp Plan), provided specific suggestions about how to effectively communicate a new plan. A logical next step to that advice is to consider gaining sales force feedback about the new plan, preferably shortly after the first payment has been made under the new plan. In our opinion, it is wise to validate through sales force feedback that the new plan is well understood and, therefore, supports the behavior and performance that management desired from a plan change.
Here is a brief description of two techniques that we find are productive approaches to gaining that feedback.
FOCUS GROUP DISCUSSION SESSION
We find that a facilitated focus group session is one of the most effective techniques to use to gather sales force feedback on a sales compensation plan (either “new” or continued from prior year). Here are two suggestions about how to implement an effective session:
- Format and ground rules. Setting the stage for a productive session is essential to gathering useful information. The facilitator’s role should be defined (e.g., guide the discussion; bring participants back on point, ensure that everyone participates). Participants should understand how/why they were selected for the focus group; and, encouraged to freely share their point of view even if it differs from what others have said.
- Discussion questions. Based on years of experiences with focus groups in many industries, we find that the following topics/questions are effective in drawing out meaningful feedback from sales reps about the compensation plan:
SALES FORCE SURVEY
As an alternative or complement to Focus Group sessions, we find that a web-based sales force survey provides useful information about sales reps’ attitudes about a new plan. The best time to conduct such a survey is after the first payout of the new plan. Our experience shows that the most useful questions to ask about the plan are as described for the Focus Group session, but “close ended” are as follows:
Recalibrate and Resolve Any Glitches Quickly
No matter how well prepared sales managers are for launching a new sales compensation plan, some glitches always arise. The larger the sales organization or the change, the more likely it is that you will run into some unanticipated issues. Focus groups discussion and a sales force survey can be helpful in identify such issues. Two types of issues that can come up through sales force feedback initiatives are:
- Things that aren’t clear. Common examples include: 1) New performance measures were implemented, but sales crediting related to these measures has not been defined and documented in new terms and conditions description. 2) Some salespeople misunderstood the incentive formula mechanics, a common problem when calculation involves multiple steps. 3) Quotas appear too high (relative to prior year(s)), which means salespeople either misunderstood or are challenging the process by which quotas were assigned. 4) Salespeople have many questions about the plan but they are unclear about where to go to get straight answers.
- Systems that aren’t working. Common examples include: 1) Sales results are late, incomplete or inaccurate, and therefore salespeople and their managers spend a great deal of time trying to sort out results and the implication for incentive payment under the new plan. 2) Incentive payouts are delayed either because sufficient time was not allowed to reprogram systems to make incentive payments or because there are problems in tracking and crediting sales results.
To gain maximum motivational mileage from a new sales compensation plan it is critical to monitor the impact of the plan on sales force behavior and performance. Thus, gaining early feedback on how well the plan is understood and what issues it may be creating for salespeople and their managers should be a first quarter priority for both sales compensation plan designers and the sales executive team.