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- Introducing one’s opportunity to others
- Supporting others
- Developing other leaders
- Selling to customers
While introducing a new compensation plan companies should make sure that the intended plans deals with these specific behaviors. Companies should expect positive as well as negative responses from their sales representatives. Responses from salespeople will vary. Some may deny about any change required, while some may reject the proposal of a new plan instantly. Many sales persons will welcome this change and become ready to commit to these change.
A company needs a consultative approach in executing their plans in providing a new compensation scheme. Following are some tips that will help to ease this process:
Gathering inputs during the process of determining new plans:
During the process of determining new compensation plans a proper consultation with the sales representative can provide useful information. Gathering inputs helps to make any changes in a pre-planned compensation scheme.
A need for change:
Change is inevitable whether good or bad. But a proper way in explaining the consequences of any changes made in the current compensation plan will help sales representatives understand the issues and this will result in a positive approach in buying the solution.
Offering suitable alternatives:
A company should come up with three or four compensation plans. Allowing sales representatives to choose among several compensation plans motivates them more effectively. Providing alternatives in compensation plans helps sales representatives to match their tolerance for risk to their compensation.
Managing employees effectively:
Apart from introducing any new plans, proper management is required to fulfill any needs of the sales force, whether personal or professional to keep them motivated.
These steps will certainly ease the process and help an organization implement its new compensation plans successfully.
Tips for Compensating Teams
Every organization is concerned with the challenges to compensate teams and their members in a unique way. Teams have become an omnipresent feature in a business landscape due to the increasing complexity of the sales process and greater focus on customer satisfaction. A team-based approach ensures excellent profits.
Teams range from a large group of sales representative, customer staffs support to a small group comprising of a sales associate and his assistant. Compensating a team should be based on value. In other words, a team which delivers good results should be given a good compensation. A nice compensation package encourages team behavior and encourages them to work hard and get the desired results on time. It also encourages sales representatives to stimulate each other in rewarding other team members. This means that teams will be encouraged to help other teams in reaching their own goals.
Many companies compensate teams with the same compensation plans that they use for single sales representatives. This mistake may result in inefficient performance. Another important factor is to recover costs associated with the team. Many companies do not calculate expenses such as furniture, computer, internet, office space, parking which support an individual who is working for the company.
An approximate estimation of the costs associated with each person helps in designing an effective commission structure to recover expenses. This can be done by creating a separate pay schedule for teams that accurately reflects the goods and services they consume.
Allocations of expenses and commissions according to each member’s expected contribution can be possible if a business plan is created by each team. To ensure the consistency of this plan a proper review should be conducted each year to make sure that it actually represents each person’s involvement in the team. The advantage with this approach enables teams to decide what resources it needs.
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