The Ingredients of a High-Performance Sales Culture
COMPENSATION and CELEBRATION
As we have shared previously, we are doing a series of posts of what we have observed superior sales organizations do to shape a High-Performance Sales Culture. Each post will feature one ingredient, followed by a few questions to challenge your thinking.
The sixth ingredient of a High-Performance Sales Culture is Compensation and Celebration.
“Properly designed, a sales compensation plan can serve as a powerful medium of organizational communication, enabling a company to improve on its investment in a most important resource: its sales talent.” - John K. Moynahan
In sales, compensation, recognition and celebration are powerful levers to influence change. For many salespeople, compensation communicates what growth is expected and the behaviors the organization wants to encourage. The best sales teams celebrate and have fun!
Here are practices of organizations who excel in this ingredient:
- Compensation – The best sales organizations reward based on year-over-year performance and contribution. They set the expectation that the salesperson must grow the business from one year to another, and if not, they stand to lose a significant portion of their year-end bonuses. They do not pay from “dollar one” or just straight commission.
- They monitor the compensation strategies of other companies and adapt their pay plan yearly to reflect their desired outcomes. The pay plan is a written document that every salesperson signs each year to affirm they have reviewed and understand how they will be paid throughout the year.
- They celebrate and recognize frequently in order to promote a “culture of winners.” They do so through engaging and inspiring meetings throughout the year and through one-on-one messaging directly with each high-performing salesperson.
- The sales force has a friendly rivalry and fun spirit. Leadership sponsors event-oriented celebrations such as President’s Clubs to promote memories and solidify employee engagement.
Questions to Consider:
- How often do you review and revise your compensation plan to ensure it is clearly linked to performance and to the organization’s objectives?
- What percentage of a typical salesperson’s pay is due to year-over-year growth?
- Please describe the formal recognition plans that are in place and their frequency
- What % of the sales force receives formal recognition each year?
Next Up: Metrics and Scorecards