Author: Patricia Schuster

If your business salesforce mantra is still “make the numbers,” and you view—and pay—your salesforce differently from the rest of the workplace, your company could be operating at a competitive disadvantage, putting the entire enterprise out of sync with business strategies and goals.

But your company is not alone. Many businesses continue to isolate their salesforce from the rest of the organization, paying them based on short-term sales performance against quotas and targets. In many cases, this has led to immeasurable problems when quota-driven salespeople promise things their company can’t possibly deliver.

In contrast, today’s most successful companies emphasize not only overall selling performance, but also measures of customer retention and penetration, as well as product or services that are either strategic to the business or most profitable. The pay solution at these companies is used to connect business strategy with action, and the selling process and business strategy are closely linked.

Great companies are making the sales organization an integral element in the overall business process. Designing your company’s sales compensation is a major opportunity to gain advantage by communicating accurately with the salesforce and creating a solution where rewards are based on achieving business-aligned goals.

Even the view of the salesforce as separate from the rest of the workforce is outdated, as the sales function becomes more complex and customized. Increasingly, multifunctional customer teams are partnering sales professionals with marketing, design, manufacturing, and finance professionals who work together to close the deal and service the customer.

Selling is becoming increasingly complex and interdependent. Everyone in the company is becoming a stakeholder in delivering what the selling organization has promised. Companies are using sales teams and customer teams to help the individual salesperson close the sale and satisfy potential customers, who have higher expectations than ever.

But before you change pay to reward everyone on staff with the same approach, heed this warning: Pay solutions should differ across the company in terms of design, but sharing goals should be the link across the workforce and business. This means the salesforce will likely be paid for more than just sales volume and that measures and goals may change periodically as the role of the salesforce adapts and adjusts to competitive business realities.

Salespeople may share measures and goals with other members of the workforce, such as goals of new product introduction with marketing, customer retention with customer service, delivery with manufacturing, and profitability with other parts of the workforce. This is what we call aligned business goals.

What goals does your company communicate to its salesforce? Are they aligned with business goals? Ask yourself these five questions:

1. Does the company pay undifferentiated commissions based on “top line” sales? The new approach is to pay differentiated awards based on strategies concerning customers and products.


2. Are salesforce goals focused on targets from month to month, quarter to quarter? Instead, there should be a longer-term focus on adding customer value and integrating sales with all other people at the company who impact customers and products.


3. Is there a “one size fits all” mentality? Do products compete internally for the sales focus? The sales strategy should be solid, but the sales tactics should be adaptable. The salesforce needs to adapt as the company business situation evolves.


4. Is the role of the sales professional to overpower customer resistance and sell what’s available? Today’s sales professional should be a listener, information gatherer, educator, relationship builder, value-adder to customer businesses, and the primary source of customer input to the company.


5. Are sales professionals the only customers of the company’s sales compensation, and is keeping them satisfied critical? Don’t make this mistake. Sales compensation should have many customers, including external customers.

Business strategy, marketing strategy, sales goals, and the definition of the sales role impact sales compensation design. How sales compensation is designed is also an extension of the company s total reward strategy. It communicates what is necessary to accomplish the company’s business goals.

So what’s the bottom line on rewarding salespeople? The more “yeses” you had in answering these five questions, the more likely that change is needed. How salespeople are rewarded is a critical business issue. They are the front-line contact with your customers, and they must be on the same page with everyone else on your company’s business team.

People’s expectations are on the upswing they want to participate in the global economic boom. Also many predict talent shortages will be a chronic condition of business life. In our book Pay People Right! Breakthrough Reward Strategies to Create Great Companies, we provide a roadmap for managing total rewards.

Here’s some ready guidance for everyone — whether you’re searching for a new opportunity yourself or for people to work for your company. The name of the total rewards game has changed — it’s time for a “tune up” on “getting and giving” raises.

One alternative you (and everybody else — in your company) have is to quit and go someplace else. We’re seeing a lot about this in the press. But does it really pay to quit in the long run? It seems to many people that new hires with skills and performance that may not even be up to theirs are paid more.

You’re not alone in asking this question — companies also ask what to do with people inside a company who are paid less than people they must hire from outside — so the question of how to give and get a raise is on everyone’s mind.

Let’s start with some raise-getting tactics that don’t make sense to us:

1. It’s a beautiful dream, but few of us are really going to make a killing by becoming a “talent gypsy,” roaming from company to company “reloading” stock options. While you may hear a lot about the “option millionaires,” you don’t hear about most everyone else who doesn’t become instantly rich.


2. Not many of us are really smart enough to outwit our bosses and manipulate an undeserved raise — it just doesn’t work. Not in the long run, anyway (nor should it, in our view). Frankly, few long-term careers have been assured by “putting a con” on the boss for short-term economic gain.


3. Using what fellow workers make to leverage a raise isn’t a real career-building tactic over time either. Whether you’re right or not about your pay compared to others, it’s what you do and not what others do that counts. We have never seen a “see what he or she gets” career comparison strategy endear anyone to their company.


4. Quitting and moving on is a workable short-term tactic to get paid more, but few want to make a habit of short-term employment. Do you really want a “quit to grow” career strategy? Even an entrepreneur wants to be part of something lasting and meaningful.

Now, let’s look at some new realities about how to “pay people right”:

1. Companies now realize that giving raises is a business issue. They look at the “deal” they’re making with their workforce — most want it to be a win-win arrangement. So, you need to look at getting a raise as a business issue, not just an emotional one.


2. The top companies that everyone wants to work for are paying for value; they don’t want old-fashioned “protect me” loyalty. They want loyal people who continue to grow and add value to the business.


3. Super people want to work for super companies. They also want to work for more than just high pay. The best people want to work for a company that has a compelling future, invests in people, and provides a positive workplace. Everyone wants to work for a winner!


4. Getting a raise from the best places to work depends mostly on how you help the business. Today high pay goes with high value — companies can’t afford anything else. It’s necessary to understand what your company wants and deliver it. In exchange, the company should share its future with you.


5. In a world where rapid change drives everything, you must figure out how to increase your market value and importance to the enterprise that employs you. Companies can afford to pay more to people who add more value — doesn’t this make sense?


6. Career plans can partner people with the enterprise this can produce a “win-win.” As workforce members become more important to their company, it makes it worthwhile for them to stay and add value.

If you decide to listen to our message, what’s next? What can you really do to get a raise? Here’s what we think counts:

1. Prepare a detail of your skills and competencies. Don’t write a boring and stagnant “job description,” but a capability description. Don’t focus on how long you’ve done something or even the companies you’ve worked for. Emphasize what you know and who uses it — companies that need what you know and do. What skills and competencies do you have that they need?
   
2. Go on the Internet to see what the Web sites say you’re worth. The Internet has a host of salary surveys, search organization information, and professional association data on pay, benefits and even total rewards you can use. It takes a bit of digging, but you can find a lot of information, and most of it is free.


3. Take a look at the articles on “the best places to work” and “employers of preference” that have been appearing over the last few years. These tell about things other than base pay and incentives that makes a business attractive — what the workplace, development and investment in people, and the company’s future are like. This is essential to consider because total rewards are what you’re after, not just total pay.


4. Find out everything you can on the total reward package in your company — more than just base pay and total pay, remember? Understand your stock option plan; your 401(k); your base pay plan; what it takes to get an incentive award, stock option grant and recognition; and all about development and training and career opportunities. Be open about what you are doing. Quality companies are happy to provide these data to you.


5. Talk with your manager and team leader to find out what the future is for you. Get into the performance-management solution. Explore what’s needed to make yourself more valuable to your company. It’s not a negative to tell your boss you want to be worth more. Good leaders will welcome the chance to help you.


6. Ask how your company decides what you’re worth. How do they pay for the acquisition and application of the skills you have? How do they correlate what you are paid with what you learn? Where do goals come from? How is performance measured? What can you do to meet and exceed goals? What happens if you meet and exceed goals? Understand base pay progression, incentives, and stock options completely.

Now you have the information you need, you can explore your alternatives inside or outside your company. You and your present company have discussed your future, and you both know what you’re worth. Decades of reward consulting experience suggest to us that if you have come this far, your present employer is by far the best chance for your future.

All we are recommending here is how you can test this out. If you find it’s time to move, you now have super information that can prepare you to seek a career elsewhere. If you stay, this guidance makes sense as well.