Communicating compensation plans to your sales team requires a balance of brevity and specificity that can be difficult to achieve. Below we've outlined 5 fundamental components you should include in all of your compensation plan communications. As a bonus, we've also included a link where you can download this information in a convenient checklist.
1) Draft a Clear and Concise Compensation Message
Your compensation plan rollout should be written in clear, straightforward language that establishes a complete understanding of your organization’s sales quotas and objectives. While each department may have their own specific goals, everyone should understand exactly how they fit into the bigger company picture. You should provide specific detail into what the organization is trying to accomplish, then relate that to the compensation plan. This way everyone begins their efforts on the same page.
2) Include Specific Compensation Details
If the new plan is different than the previous, then these changes should clearly highlighted and explained. You should expectations for sales performance, and give actionable and measureable insight into exactly what metrics Sales Managers are looking for in order for the sales team to succeed. Be prepared to answer any tough questions your team may have, especially if you’ve just made big changes.
3) Build an Incentive Compensation Foundation Your Sales Team Can Trust
A solid incentive compensation foundation is one that is specific, communicative, and transparent. Make sure your sales team knows exactly how sales performance will be tracked and measured. Then, outline the exact steps required for an individual to handle any questions or disputes. Lastly, be transparent about how payouts will be calculated and when they will be paid. Ensuring everyone has these key pieces of information will build trust in your system and ensures that everyone feels supported. When your sales team is confident they are being paid correctly they are better able to focus all their energy into making sales.
4) Get Specific About Your Compensation Plan Rollout
How and when exactly are you going live with this sales compensation plan? Will you use an automated medium? What kind of platform are the plans built in? Is end-user acceptance required? How can your team members check on the status, and where do they go with any questions? Make sure you’re including these pieces of information.
5) Set Appropriate Expectations for Compensation Plan Timelines
From plan approval to rollout, how much time does your team have to review, discuss, or tweak your compensation plans? Establishing realistic and firm deadlines for your incentive compensation plan will help prevent that 11th hour scramble as you approach your go live date. Depending on your plan roll-out specifics your organization may benefit from utilizing a compensation workflow platform to ensure each box is checked along the way. Workflows can drastically reduce the time needed to execute your annual plan communication process. If you’re interested in learning more about how automated workflows can assist in your sales compensation plan rollout we’ve covered that specific topic in detail here.
To help you ensure you’ve covered all your bases when it’s time to roll out your new incentive compensation plans to your sales team we’ve created a convenient checklist that covers each element of the points above. Remember, the fundamental components of effective compensation plan communication always come down to: communication, specificity, and transparency. If these three ideas rule your incentive compensation foundation your sales team will spend less time ensuring they're being paid correctly and more time focused on what really matters in every sales organization: making sales.