In a BLR webinar entitled "Sales Compensation Strategies: How to Motivate and Re-Energize Your Sales Staff in a Challenging Economy," Dan Kleinman, principal of Dan Kleinman Consulting, a compensation and human resource consulting firm, explained the necessity of keeping total compensation competitive.
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Get Your Report Now!At the same time, it is important to keep the mix your own! Beware of institutionalized costs, and beware of perceived entitlements.
- Performance below threshold is risky.
- Performance at threshold may provide less than the market remuneration.
- Performance beyond target has substantial upside pay potential.
Compensation costs need to discriminate on the basis of results. There needs to be meaningful differentiation between top and bottom performers. A distribution example might be:
- 20% of the population are out of the money
- 20% achieve threshold goals
- 45% meet target goals (or slightly above)
- 10% exceed target substantially
- 5% are absolute rainmakers
Dan Kleinman is the principal of Dan Kleinman Consulting, a California-based compensation and human resource consulting firm. For the past 18 years, he has served as an independent consultant for a broad spectrum of regional, national, and international companies, providing compensation, performance, organizational planning, and reward-system design services. He may be reached at info@dankleinmanconsulting.com