Comp Plans: To Drive or Reward?

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“Thinking drives behaviors.  Behaviors drive action.  Action drives results.  No tool can fix poor thinking.”

–  Jamie Flinchbaugh , Lean “expert” and author of A3 Problem Solving: Applying Lean Thinking*

Chatter about sales compensation plans can be trending this time of year.  If I were part of the chatter, I’d add the hashtag #dontgetitwrongAGAIN.

If a company’s goal is to have long-term relationships with its customers or clients, the sales comp plan has to reward the behaviors that leaders instill and enforce in the team.  If we’re expecting our comp plan to drive behaviors, we’ve either done a poor job of hiring, creating an environment where the team can succeed, setting expectations or holding people accountable for things other than the scoreboard.  (That’d be four of the six elements of REELAX, and it could be argued that the L and X are in play, too!)

Hire for integrity, intelligence, and coachability — and then reward smart people that execute the game plan with integrity.  No matter how good a compensation plan seems to be, it won’t correct other gaps in our team.  It might mask them, but difference-makers don’t put band-aids on deep wounds.

Effective compensation plans reward behaviors and outcomes.  Effective leaders build teams that behave and create outcomes.  If the former is too big of a focus, the latter may need our attention.

* Editor’s Note:  I didn’t link the publication, because I haven’t read it.  I am a proponent of Lean principles, and Flinchbaugh captures well the point behind this post.

 

 


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