New Sales Comp Plan? HR's 5 Must Dos.

December 4, 2012 at 7:01 AM

A post for Sales and HR leaders to ensure success of 2013’s Sales compensation plan. Included are 5 actions that HR must take to help rollout.  As well, a tool is included – a sample rollout communication plan.

Fast forward to April of 2013.  A Chief Sales Officer is meeting with Sales VPs and the VP of Sales Operations.  They are trying to decide between keeping and scrapping the recently-implemented Sales Comp Plans.  The reason?  In a word, chaos.  Q1 performance is way off of 2012’s mark, the new product strategy is failing, and Sales Rep behaviors are erratic. 

New sales comp plan - HR helps ease change.

“How can we be in this mess?” asks the CSO.  “We spent countless hours ensuring a high-quality compensation plan.” They analyzed, they built formulas, they tested the plan.  However, they missed one key formula: E=Q*A.  A solution’s EFFECTIVENESS equals its QUALITY times its ADOPTION. They nailed the quality (Q=100), but missed the Adoption (A=0).  100*0=0 Effectiveness.

Ultimately, Sales Managers are the crucial key to any kind of Sales force adoption. But to ensure the highest adoption, Sales must leverage HR.  World-class HR is a center of excellence for Change Management. They must help Sales with these 5 adoption-improving steps:

1. Assess Adoption Risks – After you find the risks, plan your mitigation actions including communications.  However, can you truly uncover the landmines? Through multiple engagements, we (SBI) know which rocks to look under and what pitfalls to watch out for.  Look in these areas for adoption risks:

  • Tenured top performers
  • Sales roles that are new
  • Roles that don’t have significant change in their plan (while others do)
  • New processes/procedures/tools that enable the plan – look at new dashboards the Reps will use
  • Sales Managers that are not onboard – can you spell failure?

2. Communication – This is the linchpin of successful adoption. Do it early and often. Ensure multiple methods and repeat the message in different flavors. The main message? WHY the new plan – and WHAT benefit to the Sales Reps. Consider a theme. Get Marketing involved to jazz up the whole communication effort. Communications must come from the top - both Sales and HR leadership. sample comms plan visio resized 600The walk has to match the talk. Plan out months’ worth of varied communications.  This document gives you a sample comms plan to start from.

 

 

3. (Re)Assemble a Team of Advocates – During comp plan design, a crack team of Sales personnel was used (I hope!)  Leverage this same team for rollout activities.  The team should be responsible for:

  • Exemplifying intended behaviors of the new plan
  • Providing feedback from personal experience
  • Visiting other Sales team meetings to explain the new plan
  • Evangelizing benefits to peers
  • Soliciting feedback from peers

4. Celebrate Quick Wins – The rollout team and Sales Managers must watch for early wins.  The first weeks are critical.  When found, quickly communicate the win to all of Sales.  Early success tends to bring lagging adopters on board faster.  However, you may encounter some rebels.  Their behaviors may even show rejection of the new plan.  Do not tolerate this – it will stop momentum!  Find out the reason for the undesired behavior. Win this person over and maybe get them on the Advocate team.

5. Implement and Use Feedback Loops – Feedback is needed to continuously improve and check for adoption. You must have a way for recipients of the change to speak out.  Allow for compliments (rare), complaints (many) or constructive criticism (preferred). Supply multiple channels to do so.  Allow for anonymous feedback. Integrate all of these channels into one collection of feedback.  Feedback gathering and use is ultimately owned by the head of Sales Operations. Consider supporting these channels:

  • Conversation or email from Sales person to direct manager
  • Email to a special dedicated email address
  • A special ‘hotline’ phone number to the Sales Ops leader.  Maybe even have it go to the CSO!
  • Conversation or email to an HR person. Note: Confidentiality must be maintained in these cases – or wherever a Sales Rep requests it.
  • Posting to the internal portal set up for Sales Force Effectiveness projects.  This could be via an open forum-like discussion or responding to a blog post. This portal has been set up, correct?
  • Contacting a rollout team advocate
  • Use a survey
  • An old-fashioned paper-based suggestion box – labeled for this project.

Ensure feedback is gathered periodically.  Important: communicate that feedback has been received.  Analyze and prioritize the feedback to determine what, if any, changes to make.  Make sure you announce that plan changes were the result of received feedback.

A couple caveats to keep in mind, though. HR may not understand Sales nuances or put a priority on Sales.   However, we’ve seen that Sales teams are not the best at change management.  This is what we (SBI) do – help Sales improve through design AND successful adoption of changes. 

Call to Action

  1. Check the quality of your Sales compensation plan. We use over 20 tests to ensure high-quality. Remember Quality in the equation E=Q*A.
  2. HR must view the rollout as a top priority. Year-end is a busy time for HR.  However, sales compensation is always a major percentage of cost. So, prioritize this accordingly.
  3. HR and Sales work the 5 steps above. HR – be proactive and reach out to sales to start this journey.  Pay special attention to the assessment of adoption risks.
  4. Start communicating now – it’s never too soon.  If you’re rolling out in January, you may already be too late!
  5. Contact SBI for our expertise in assessing your plan’s Quality and Adoption. Lean on us for the rollout, too, as many successful Sales organizations do.  We’ve even shown clients how their problem was NOT a sales compensation issue. Are you sure a new comp plan will fix your woes?

Fast forward to April 2013 – when you’re reviewing amazing Sales results thanks to a great formula: E=Q*A.

 

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Topics: Compensation Planning, Sales Compensation Planning, Human Resources, Change Management

Posted by Steve Loftness

Steve Loftness
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