Who should be on the sales compensation planning committee?

Now is the time to kick of your 2018 sales compensation planning season. The first phase of this planning season begins with clearly identifying the sales compensation committee members and defining their job roles.

I can usually tell when I read a sales compensation plan document who was involved in the design process. For example: comp plans created solely by sales executives will emphasize incentives and motivation; plans designed by finance will be skewed toward ensuring affordability.

Identify the head of this committee as only one person should lead the sales compensation planning process. What department is your sales compensation committee leader from? I usually find this person is in sales operation or finance, rarely in HR. The leader gathers information, opinions, and advice from other team members, and keeps the project on track and on schedule. The committee leader must also determine the approval process and make sure that “sign off” occurs at the appropriate stages of the project.

The best sales compensation plans balance motivation, revenue, costs and other corporate requirements. So when you are developing your comp plans, get input from multiple constituents to help you achieve the right balance.

The sales compensation planning committee should involve the following:

• The CEO: provides key guidance on the company’s strategy.

• Finance: delivers plan affordability guidelines and sales goals.

• Marketing: presents upcoming campaign strategies that will influence quotas.

• HR: contributes job descriptions, base salary, TTC (total target compensation) and organizational structure.

• Legal: reviews plan to ensure that they are in compliance with current laws, regulations and internal policies.

• Product Management: informs on road map for new releases and new products which can also influence quota.

• Sales Management: analyzes the attainment distribution of the current plans and explains why they may have fallen short or exceeded the goals.

• Sales Operations: provides their analysis of the current plans, as well as territory alignment.

• IT: delivers transactional data used by the compensation plan and information about the ability to implement the proposed changes to the plan.

• Participants: advise on what worked and what didn’t work in the current plans and, towards the end of the process, how they perceive the proposed changes to the plan working.

In a small company one employee may fill several roles during this upcoming sales commission planning season.

With your committee in place now, you’ll ensure your sales compensation plans are within budget, primed to motivate your sales team, aligned to strategic goals and well communicated to your sales organization at the start of 2018.

Now is also the time to line up any outside resources you need to help you design your 2018 sales compensation plans. Waiting to the last minute will guarantee your new plans will not be designed in time for your 2018 sales kick off. Have you ever tried to hire a CPA to help you with your taxes on April 15?