Compensation drives results. If you change the plan, you can change the behaviors of the sales force.
This is how most sales leaders think about sales compensation. There is nothing untrue about the idea that compensation can drive behaviors. What is wrong with this statement is that this truth is partial. It is a very small part of the truth, and it leaves out the other—equally or more important ways—to drive behaviors.
Far fewer people than you believe are money motivated. If compensation plans alone were enough to change behaviors and reach your goals, you last compensation plan would have worked (and it’s likely it did for some of the people who are money motivated).
The greatest way to change sales behaviors are to lead those changes. That’s right, the best and most effective method for changing behaviors is to lead them.
People will help you launch a new product, enter a new market, and sell at higher margins if you help them understand why it is important, how it benefits the company, and how it is in their long term interest.
Compensation is no substitute for leadership.
You are allowed to ask people to do the things that need done and hold them accountable for doing so. You are allowed to do this without changing the compensation plan. You can ask them to do it just because it is what must be done now.
You can also hold them accountable for doing so. Not every change requires a change in compensation, and there is a strong argument that you set a poor precedent by always having to compensate a necessary change.
More money isn’t a replacement for accountability.
Some people are more motivated by recognition than money. You can effect a change by providing recognition and heaping praise on people who produce results.
Too many companies are too stingy with praise. They dole it out like it a rare and expensive commodity. Then they don’t understand why people feel unappreciated, why they are unengaged, why they aren’t motivated, and why they eventually leave.
Recognition is free. So is gratitude.
There are plenty of reasons to change a compensation plan, but using only the compensation plan to drive change is to leave many other more powerful and more potent weapons unfired.
If compensation is the only tool you intend to use to drive behavioral changes, you aren’t going to achieve the results you are capable of, not will you do so as quickly as you could.
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Filed under: Culture