Compensating New Sales Roles: How to Design Rewards That Work in Today's Selling Environment

Compensation Is the C Aboose, Not the Engine

Because managers expect sales compensation to play an important role in linking the behavior of salespeople to the achievement of business objectives, they often expect too much from their sales compensation plan. However, as we frequently tell our clients, "the sales compensation plan is the caboose, not the engine." What we mean is this: The sales compensation plan cannot create a successful sales strategy. It can, however, be quite helpful in supporting the plan, or in reinforcing the direction of a sales strategy and communicating what that strategy is designed to accomplish.

When a company misses its sales targets, it is instructive to understand why those targets are being missed rather than ...