Sales Compensation Review - Why Should You Do It? Consider How a Sound Sales Compensation Plan Can Help Your Company.

Motivation  Properly done, a good plan motivates salespeople to higher levels of achievement. Accountability and Measurement  A major by-product of an effective plan is management's increased ability to hold individuals accountable for their performance and to have additional measurements with which to gauge success. Hiring and Retention  If a productive sales group is critical to the success of the company, then retaining and attracting quality, high caliber sales personnel is essential. If your compensation plan isn't competitive, you've got a serious problem. You can't fully address this possibility unless you take the time to assess.

Competition  It continues to get tougher. New methods of reaching your prospects and customers, such as e-commerce and telemarketing, can serve to make the conventional methods of sales compensation obsolete. New forces in the market place can demand new reward strategies for your people.

Productivity  Paying for performance is at the heart of any productivity issue. Close examination and review of current plans can uncover areas, such as territory or account coverage, sales force size, training needs, etc.

Morale  Inferred in a well thought out compensation plan are the things that benefit salespeople directly, i.e., the concepts of high rewards for high producers, fairness, and respecting the value as well as the needs of the sales group. Taking the time to make sure you have the right plan for the right people sends a very positive message to the entire company.

Costs  The sales administrative budget, especially sales compensation, can be a large portion of the entire budget. Making sure that every dollar paid in sales compensation has a measurable return to the company, and can be evaluated in that light, invariably leads to management decisions and actions that result in either (1) lower costs or (2) a higher return on dollars spent.