For years, sales professionals – along with their Human Resource and business line support partners – have relied on incentive compensation and sales commissions as the primary tools to recognize and reward sales success. In today’s economic climate, however, most sales professionals will not enjoy large gains in pay for performance compensation as occurred in previous years. The Alexander Group, a well-known sales growth consulting firm, predicts 4% increases in sales incentive compensation pay this year. When the escalating costs of food and gasoline quickly whittle away four percent increases, a sales commission plan quickly loses its desired motivational impact.
What can sales professionals, HR business partners, and operations teams do to ensure organization success and continued employee motivation during these uncertain economic times?
Adopt a total rewards perspective.
The concept of total rewards is that an organization has many tools for employee reward and recognition. It’s no longer all about base pay, bonuses, and benefits. Today’s proactive organizations use all five elements of total rewards to attract and retain employees. These five elements,
• Pay,
• Benefits,
• Work / life balance,
• Performance and recognition, and
•Development and career opportunities,
provide an organization with many non-cash opportunities to motivate and retain its talent. Non-cash total rewards can effectively recognize specific behaviors necessary for organizational success. Given the variety inherent in non-cash rewards, they also permit greater flexibility for customizing the total rewards package to reach each employee’s motivational sweet spot. Moving beyond formal cash compensation programs also allows faster recognition opportunities. The quick response time afforded by non-cash rewards may be desirable to many employees, particularly Generation X and Y team members, to whom six months may seem like a lifetime. Depending on the type of non-cash award provided, there may also be little or no income tax implication, music to everyone’s ears. Lastly, non-cash rewards allow an organization to recognize employee achievement without a possible negative impact on cash flow or increase to fixed costs.
When developing a total rewards program, it’s important to consider these guiding key principles:
1. Link the program’s elements to your organization’s strategic plan, mission, and values. You don’t want to reward individual achievement if teamwork is a valued behavior. Likewise, use meaningful objectives such as reducing excess inventory, selling higher margin products, or increasing customer retention, to obtain the greatest return on investment (ROI) from the program.
2. Include both short- and long-term goals. Both play an important role in ensuring sustainable organizational success, particularly in a challenging economic climate.
3. Tailor the program to employees’ specific needs and wants. For example, while pre-paid gas cards may possess high motivational power for someone in Texas, a New York City resident may instead appreciate a four-day workweek. At the same time, someone in Chicago may prefer cross-training opportunities. Build a variety of rewards into your toolkit for maximum ROI.
4. Ensure that line of sight exists between the employees’ job duties, their goals, and their rewards. An employee must be able to influence and achieve his / her goals through regular work activities.
Sales professionals and their business line partners must move beyond the traditional base + bonus + benefits mindset to be successful in today’s economy. By considering all the possible compensation elements – or total rewards – sales professionals open up a world of compensation opportunities that are better tailored to their needs, both professionally and personally. Proactive, engaging organizations use a total rewards approach to attract, retain, and motivate the best possible talent. Using a total rewards approach ensures a win-win work environment for both parties.
Using Total Rewards to Motivate Sales Professionals During Uncertain Economic Times - To learn more about this author, visit Jennifer Loftus's Website.
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