sales comp guy logo

Sales Comp Guy

Building Trust in Your Sales Organization: The Road to Fair Play

183:906269490 • February 12, 2024

Part Three on Trust in Sales

In parts one and two of the series, I talked about why trust matters and how to determine whether you have trust in your organization. Now, we arrive at the cornerstone of building and maintaining trust: the sales compensation plan and the governance and administration that come with it. This structured approach is vital to cultivating a culture where fairness, transparency, and equity are not just ideals but practiced norms.


The Keystone: A Clearly Documented Sales Compensation Plan



A well-documented sales compensation serves as a tangible commitment from the leadership to its sales force, encapsulating the ‘rules of the game.’ This clarity ensures that every salesperson understands how their efforts translate into rewards and what behaviors and outcomes the organization values. When salespeople see the direct correlation between their performance and compensation, trust in the system grows.


Governance and Administration


Governance refers to the mechanisms put in place to ensure that the compensation plan is executed as intended. Administration, on the other hand, involves the day-to-day management of the plan. Both must be designed and implemented with precision and integrity.


1. Governance: Establishing a governance committee with a clear charter can offer transparency and consistency. This committee should oversee the compensation plan’s effectiveness, make necessary adjustments, and communicate changes promptly and clearly.


2. Administration: The administration should be impeccable in managing crediting and payouts, resolving disputes, and maintaining records. Any discrepancies should be addressed swiftly and communicated transparently to prevent an erosion of trust.


Creating a Culture of Fairness


Fairness in sales compensation is different than base pay equity guidelines. That is because of the nature of the amount of pay at risk under sales compensation’s pay-for-performance methodology. There’s no way to provide equal pay if the payout is determined by differing sales results. That’s why we have to think in terms of equitable opportunity. Equitable opportunity means every salesperson has access to the resources and support needed to succeed. That also translates into equitable market/business segment levels, comparable quota targets, and consistent performance evaluations. When sales teams believe that the playing field is uniform and that they are judged purely on their merits, the culture shifts. Salespeople become more collaborative, knowing that their success is not predicated on another's failure.


Transparency and Equity: The Heart of Fair Play


Transparency in this context means that every aspect of the sales compensation plan is visible and understandable by the sales staff. Equity goes a step further; it's not just about being fair but also about being perceived as fair, and decisions are consistently applied. When sales teams view the administration and processes as equitable, it reinforces that they are valued members of the organization, leading to enhanced motivation and commitment.


Equitable opportunity is a commitment to providing all salespeople with equal access to succeed. This includes:


  • Training and Development: Investing in the growth of each salesperson ensures they have the skills to compete effectively.
  • Sales Assignment: Distributing territories, accounts, and/or leads in a manner that's as fair as possible. Any sense of unfairness can be detrimental to trust.
  • Tools and Resources: Providing the necessary tools and resources to each salesperson levels the playing field and removes barriers to success.


Conclusion: Developing Trust is Ongoing


Leaders must nurture the ecosystem of their sales organization. Trust is the soil in which the seeds of success are sown, and a well-documented sales compensation plan, coupled with fair governance and administration processes, is essential for growth. By cultivating a culture of fairness, transparency, and equity, leaders not only foster trust but also build a resilient sales force capable of weathering the storms of change and competition. As we conclude this series, remember that trust is dynamic; it requires constant attention and care. Invest in these clear and objective methods, and watch as your sales organization thrives, grounded in a solid foundation of trust.


By 183:906269490 December 16, 2024
In my first Best Practices post, I talked about the importance of knowing what you can pay for your sales roles before worrying about what the market is saying. In my second post, I covered ways to utilize culture in a sales organization . The following Best Practice in sales compensation involves job content. Job content plays several roles in your compensation plan: 1. It gives your salesperson a guide to what success looks like in their role. 2. It gives you a guide to evaluating the performance of your salesperson. 3. It rationalizes differing levels of variable pay outcomes for varying performance levels. 4. It provides your organization with the structure needed to comply with any reporting, pay transparency, or other regulations. Hopefully, that’s enough to convince you of the importance of taking the time to define your new roles and revisit the definition of your existing roles. Now, here’s how job content actually does those things. Defining the job The first role of job content is to define the who, what, where, when, and how of the function. It can be tempting to borrow a job description from LinkedIn, Glassdoor, etc., with the assumption that the content will be similar enough to fit your needs. However, the way a specific role performs is unique to the organization it’s acting in, which is why it’s important to take the time to define the job from scratch. Here are the questions you should be answering in your job content: What does the person need to do on a daily basis? How does this individual pursue sales, and in what segment or with what type of customer? Where should they focus their time and attention when building a pipeline of deals? Who should they be interfacing with, both internally and externally? When do they engage with customers and/or prospects? What portion of the sales process do they own or support? How do they interface with and influence decision-makers? Now, even though I said to write your job description from scratch, that doesn’t mean this is the time or place to get too creative. Job seekers are going to be searching by job title or category, so it’s essential to stick to the common vernacular regarding industry jargon and expected job titles. Job Description: A Byproduct of Job Content Another positive outcome of creating job content for your roles is that you will have generated much of the information needed for a job description if or when you’re ready to hire. Information such as: Job duties and responsibilities that clarify the type of work and engagement with customers. Qualifications/Requirements that are both minimum and desired. Those include education, knowledge, skills, capabilities, and competencies. Performance measures of the role include items like achieving sales targets, new logo acquisition, development of pipeline, accuracy in forecasting, etc. With all of this information on file, it will not only be easier for you to prepare to hire for the roles you want, but it will also be easier to evaluate existing employees in those roles. Beyond all of that, you’ll be well prepared for competitive market research and establishing your variable pay program. I’ll be posting more best practices on the blog, but if you’re anxious to dive deeper into the subject of sales compensation, you can grab a copy of my book Starting Simple: Sales Compensation and consider working through the companion Workbook to build a sales compensation plan from scratch.
By 183:906269490 November 30, 2024
Best Practices in Sales Compensation Part 2
By 183:906269490 November 4, 2024
Best Practices in Sales Compensation Part 1
By 183:906269490 October 22, 2024
Aligning Compensation Strategies with Sales Leadership Objectives
By 183:906269490 September 9, 2024
Key Strategies to Align Your Sales Team for Success Next Year
By 183:906269490 August 26, 2024
Exploring the intricacies of sales compensation for specialists
By 183:906269490 June 4, 2024
Understanding Pay Equity
By 183:906269490 April 23, 2024
Incentivizing Success Beyond the Office
Job content for sales roles is more than job description
By 183:906269490 April 9, 2024
Creating detailed job content for each sales role can help your team succeed and prevent conflict or disputes.
By 183:906269490 March 26, 2024
How DOL requirements affect inside sales compensation
Show More
Share by: