Let’s be real for a minute. Everyone likes for their hard work to be recognized and to receive compensation in return. It makes employees feel more motivated, and it could be the encouragement your sales team needs to be productive.
Today, you also need to avoid staff churn – and poor compensation may be one factor in that. It’s worth looking at it in detail.
Of course, compensation plans don’t always require monetary reward. A great compensation plan can be a combination of flexible benefits, certain medical care, or a variety of different perks. Nowadays people aren’t just working for money but rather for a balance of a several different things that have become as valuable to them as literal dollars.
So before we look at some red flags that tell you to act, let’s review what the main compensation package requirements are from an employee point of view.
What Employees Want from Compensation Packages
Transparency
A well-informed team member is a happy team member. Be open and clear with your employees from the start. Hold a meeting where you go through the ins and outs of your compensation package and give ample time for questions and concerns.
More than Money
As we said before, the worker of today wants more than just money. They want to feel valued, they want recognition, they want respect, and the ability to demonstrate their expertise. Show your employees that you trust them and their skills by giving them challenging opportunities.
Health Benefits
Healthcare has risen up the agenda in recent years. People are concerned about their health! So – give them wellness benefits, a gym membership, discounts with a specialist, etc. A healthy employee can do more for your team than a sick one.
But what are the red flags telling you that you urgentlky need to review your compensation plan?
Four Signs Your Compensation Plan Is Not The Complete Package
1 It’s Difficult to Track Progress
Lack of a decent, accessible CRM brings an absence of clear, measurable sales goals. This can demotivate your reps. If the process for earning commissions is opaque or if the goals are moving targets, sales personnel may feel their efforts are futile.
That’s why it’s crucial to establish transparent, achievable benchmarks that your reps can see on a dashboard. This leads to motivation and retention.
2 Inconsistency and Lack of Clarity
Clarity in a compensation plan goes beyond preventing confusion; it builds trust. If employees discover inconsistencies or feel they’re not receiving the full benefits they’ve earned, it can lead to disillusionment and disengagement.
Regular, transparent updates and open forums for questions will help mitigate misunderstandings and foster a culture of openness.
3 Consistently Poor Performance
If underperformance becomes a trend rather than an exception, it might not just be a lack of effort or motivation. It could reflect a misalignment between the compensation structure and the employees’ values or market standards.
Assessing industry benchmarks and integrating performance-based incentives can reinvigorate a stagnant sales force.
4 Having an Ineffective Employee Review System
An outdated or ineffective review system can obscure the real picture of employee performance and hinder professional growth. Without accurate feedback and clear objectives, employees may not understand how to improve or advance within the company.
Implementing a dynamic review system that focuses on training and career development, regular feedback, and clear, achievable goals can significantly enhance performance and satisfaction.
360 Consulting Can Help You with Your Sales Compensation Plan
We’ve written in detail about how to rebuild your sales compensation plan – we did this, not because of red flags as such, but because your plan may have been good so far but less right for your business now. Or simply because you need to retain your top talent as more businesses are trying to poach them!
If you’d like to solve some of those red flags or simply rebuild a sound sales comp plan, contact us today for a free consultation and let’s talk.