3 Steps to Improve Compensation Plan Communication

You’ve designed a stellar compensation plan. You’ve transformed unruly plan elements into elements that will succeed time and time again. You have engaged with data-driven modeling to analyze potential payouts, and senior leadership has approved your plans. Now it’s time for your last step: Communicate the plans to sales team members and execute your strategy to perfection. Sadly, what seems like the easiest step is actually quite difficult, as even the best compensation plans can fail if not properly communicated. Creating a universally accepted incentive compensation plan is no easy feat, especially when it involves change. This is generally challenging for three reasons:

• Sales reps often believe a redesign will somehow cause them to lose existing benefits.
• Employees are naturally (and sometimes understandably) wary of what management might consider “changes for the better.”
• Management may lack the ability to clearly communicate new plan changes in a way where reps recognize what’s in it for them – which is critical for adoption and buy-in.

Keeping your sales force updated is critical to the success of your compensation plan. Here’s how to ensure you are able to maintain communication of the design, and ultimately get everyone on board:

Step #1: Assemble a Solid Communication Team

The plan should be communicated starting with sales management at the highest level (i.e., VP of Sales, Chief Sales Officer, or similar). Also, sales managers should be used to leverage their sales performance management expertise. Keep in mind, however, that not everyone at the management level is necessarily a good fit for your communications team. If a sales manager is uncomfortable with the communication of daily responsibilities, can you count on them to ensure the communication of plan changes to reps? Choose those who have shown the ability to step up and be vocal in the past.

Step #2: Be as Transparent as Possible

With the right team assembled, it’s time to open the lines of communication as much as possible. Make sure sales leaders provide the full scope of plan development and all it entails. Your staff needs to clearly understand the difference between the old plan and the new one—and most importantly, what’s in it for them. Benefits are what will motivate them. Transparency isn’t only critical for relaying the fine details of upcoming incentive plan changes; it’s essential for getting everyone fully engaged in assessing current sales compensation plans to keep fine-tuning them for future success.

Step #3: Prepare for Success

Ensure sales managers are employing effective plan communication techniques by asking these questions:

• Do your sales reps see what’s in it for them?
• Are the sales objectives clear?
• Are the compensation plan details clear and easy to understand?
• Does everyone understand the importance of compensation management and commission tracking to the new plan?

Remember: Even the best incentive compensation management software can’t be better than the process it’s automating, so make sure you’ve designated key decision makers to oversee the rollout process and ensure everything adds up. New changes are never easy to implement, but effective communication will increase your chances for success.