The first step in creating an effective sales compensation system is to develop a strategy that is derived from the objectives of the organization and its business strategy and that is a good fit to the context within which the organization operates. The importance of sales will depend on that context. A monopoly with no … Continue reading Developing A Sales Compensation Strategy
Once the market of choice is defined and the prevailing levels determined an organization must decide how it pays relative to that market. Most organizations will define multiple markets, each selected for a specific skill set, occupation or category of employee. And the competitive posture may be different for different types of employees. It is … Continue reading Adopting An Appropriate Competitive Posture
There are programs that do not stand up under scrutiny and that will breed suspicion that the playing field has been tilted in favor of executives. These “third rail” programs should be avoided. They can be recognized by their characteristics: High Upside Potential; No Downside Risk: Adverse reaction is inevitable when certain types of programs … Continue reading Executive Compensation: Programs That Should Be Avoided
Variable compensation can be suitable for all types of organizations. But the type of variable compensation plans that best suit the context varies across organizations and even across employee types within an organization. Whether or not an organization adopts variable compensation should depend on the type of environment it operates within, its culture, its strategy … Continue reading Is Variable Compensation Suitable for Your Organization?