Compensation Strategy Thoughts for 2012

An area that needs tended to and evaluated periodically is your compensation program. Here are a couple of articles that will shed some light on commissions vs. bonus and then on the actual incentive program keys. Good timing as this should be top of mind heading into a new year. A great way to focus the compensation program to match company goals and initiatives.

Read commission versus bonus and then designing a world-class incentive program.

Become Your Companies Chief ‘Looking Around The Corner’ Officer

Recently had the opportunity to read a manifesto that Robert Bloom wrote. It was called Looking Around The Corner and shatters some old-school thought processes of looking ahead every year. He comments that, “This fixation on an obsolete planning process guarantees that firms that use it will not keep pace with the rapid, substantive changes in our business world”.

As I plan for the new year of 2011 and develop the strategies and tactics necessary to achieve our overall objective, this doc hits home and gets the creative juices flowing on how we will go to market in a multitude of areas.

Great stuff. Get it at Change This.

The ‘Not So’ Dreaded Performance Review

The Performance Review. I have been doing performance reviews of sales people since 1997 and I conduct them every quarter. For the longest time is was associated with taking a look at the most recent quarter and spending upwards of an hour or more in finding all of the substandard results and benchmarks not achieved by that particular sales person. There were moments where you could extend some praises about their performance, but, this review process was not about feeling good all the time. This was supposed to be used to point out the shortcomings and to continue the training of the individual being reviewed. It always ended up being about the numbers and what was not getting done.

My initial goals about these reviews revolved around three basic principles. One was taking a brief look at the past, the most recent quarter, and possibly further back if there were some trends happening that needed further conversation. The second principle was about the present and what was being done to move towards achieving all of the stated performance standards. The last principle  is basically the future and focused on activities and tasks to accomplish the annual and/or long term goals.

The most recent quarter that just ended I decided to take a new approach to the reviews that I was conducting. With everything that is going on in the industry, i.e., customers are buying less, customers are shopping, the competition getting a bit creative and no real business growth overall, I found that I didn’t spend as much time on the past quarter and pounding the reps about the numbers. As I said in all my reviews, “I can’t change or fix these numbers”. I probably spent 15%-20% of the review looking at the numbers versus the old average of 75%-80%. It was refreshing to just highlight some numbers and discuss where they were at and get some feedback from them on the numbers.

Where I spent the majority of the  time was on creating new ideas, bringing support to the rep, looking at ways to enhance commissions and more time engaging the rep in conversation and active listening to provide support. We spent time on the following key areas:

  • Reviewing each account and where we were at with them and if needed what support can be given to enhance that particular account.
  • Finding ways to enhance their income.
  • Removing challenges and obstacles.
  • Using technology to help with their sales.
  • Providing tools/resources to assist them in their sales.

I know that this new and updated way that I am doing performance reviews is not cutting edge. I do find that these latest reviews would sometimes go 2 hours or more and it would be me having to work at ending the review. These were positive and the two-way discussions we energetic and rewarding. I can’t wait until the next quarter!!