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Here are three tips to help ensure your sales team compensation plan hits the right target.


Ensure that your objectives are clear. The compensation plan needs to reward what you define as ‘performance’. This means that, if you tell your team you want to drive volume growth in the overall customer base, but the compensation plan only rewards winning new accounts, you will be sending out mixed messages. What will happen in reality is that you will motivate the team to focus on new clients rather than keeping the existing ones happy.

Remember, what you aim to achieve may not be the behaviour you’re currently rewarding via the compensation plan.


Involve the finance department (shock, yes the dreaded bean-counters – Ed!) as early in the planning process as possible. This will help them understand the impact on the top line and the strategy you’re following.

What’s more, their business perspective and financial rigour will ensure the rewards you develop are properly tied to the behaviours you want to encourage.


Take a retrospective look at the company’s current plan to determine what incentive payment each team member received – not in absolute monetary terms, but as a proportion of revenue that each individual generated for the company.

Those stratospheric bonuses paid to the top-performers often turn out to be value for money compared with the smaller amounts paid to under-achievers or the wrongly focused.

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