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.