Tag: Sales Compensation Plan – Operations

Does it sound familiar?

Especially for those in sales, we have all experienced the situation when in the middle of the year we realise that we have done already our target. Of course, the opposite many times occurs, whereby we are reaching the end of the year and we understand we will not make our target as we are far from it. 

There are situations that justify for an organisation to alter the sales budget in the middle of the year, sometimes more than once. Targets are not settled in stone and it is a vibrant part of the sales organisation.

Here are some preliminary rules we need to follow.

Budget/Targets are there to stay: Changes should not happen, unless there is a very important reason to do so. The fact that a few sales people in the sales force are not going to make targets is not a reason to change them. If you are also realising all of your sales people are overperforming, is not again fair to change targets just because you realised you set the targets wrongly in the first place and you are going to pay more than you thought so.

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I’ve been in sales for more than 15 years now. I’m well practiced at the sales process. I know I’ll get my quota every year, and my company will let me know what targets they want me to meet. Most years, I’m given my “Commission Plan” at the start of the year. This tells me the amount of commission I can earn, along with any other incentives I could be eligible for, and all the terms and conditions of the sales scheme.

That is, aside from that one year when I received my plan in April. Anyone who’s in sales can well imagine how stressful it was working for the first four months of the year not really knowing where management wanted me to focus. Was I supposed to bring in new clients? Build relationships with existing clients? Put most of my effort into the most profitable client accounts?

Being late sending out commission plans is a surprisingly common administrative pitfall – and it’s unfortunately one of many! Managers don’t always spot administrative pitfalls, or understand how dangerous they are. After all, it’s just paperwork … right?

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