Companies may also add additional incentives to sales compensation plans. Common incentives include offering fixed dollar bonuses or multiplier “kickers” to promote team selling, cross-selling, sales of specific products, and increases in customer satisfaction. These incentives can motivate desirable behavior in some circumstances (see Why Incentives Fail), but this motivation comes at the price of adding complexity to the sales compensation plan. When sales compensation plans become so complex that salespeople cannot rapidly calculate how their performance impacts compensation, the plan loses much of its motivational value.
Management should carefully consider which behaviors they wish to promote via sales compensation plans. They should consider the question, “Are these behaviors truly critical to our sales goals, or to other strategic goals?” If management decides that there are indeed multiple behaviors that should be promoted via the sales compensation plan, they should consider providing some type of “compensation calculator” to their salespeople. This calculator could take the form of a spreadsheet that enables salespeople to enter a handful of numbers and instantaneously calculate compensation. A compensation calculator will also come in handy when sales managers are explaining the compensation plan to sale candidates or new sales team members.