Compensation Communication

According to a recent WorldatWork survey of compensation practitioners and HR managers, 76 percent of organizations report revising their sales plans every year as a matter of course. However, the same survey found that only 58 percent of organizations communicate these changes directly to the frontline sales manager. This lack of communication can affect quality hiring decisions, states WorldatWork, a global human resources association focused on compensation, benefits, work life, and integrated total rewards to attract, motivate, and retain a talented workforce.

"Organizations face increasing challenges recruiting and retaining sales talent, and better communication that motivates the entire sales force could be one solution," said Jim Stoeckmann, a WorldatWork practice leader who focuses on sales compensation. "Frontline managers play a really significant part in communicating, coaching, planning, and being a critical part of communicating to employees. If you skip over them (inadvertently for the most part) and go directly to employees with a mass email, you’ve undermined their ability to be effective managers, coaches, and communicators. It’s usually an error of omission."

Since frontline sales managers are the people doing the hiring, their ability to understand the incentive plan is really critical to making the right hire and putting together the right recruiting message, says Stoeckmann. If they fully understand the compensation and incentive program and are kept up-to-date, they can be very effective recruiters.

"They need to understand the employee value proposition," Stoeckmann says. "What is it that differentiates your organization from the others? This message needs to be part of the recruiting process."

"Communicate, communicate, communicate," says Stoeckmann. "You need to repeat it frequently so people understand how total rewards play a role in your company’s ability to attract talent. Keep it top of mind. Make sure it’s incorporated not only in management training, but also the recruiting message such as a brochure.

"We found that in the past five to six years roughly two-thirds of the organizations are making changes in their sales comp planning every year," Stoeckmann continues. "You combine that with the fact that they don’t often engage their frontline sales managers in the communication and launch of the plan, there may be a circle that’s created. The reason you are making the plan changes is to maintain an effective recruiting strategy and retain top talent, but if you leave out the frontline sales manager, the effectiveness of the plan is probably going to be less than optimal. It’s not going to be communicated. So then the company thinks its plan isn’t working and it turns into a vicious cycle. It’s all about involving, including, and relying on frontline salespeople as critical communication sources."

Stoeckmann warns that companies should think of their sales compensation plans as a reason for new recruits to join. "It has to be a total package," he says.