WorldatWork Nov. 1, 2016

Communication &  Culture of Accountability

The importance of communicating clear expectations and having a strong culture of accountability within organizations has been a hot topic of sales compensation conversations lately, particularly in light of Wells Fargo’s recent fallout.

“Effective communication is at the core of critical success factors for any sales compensation plan,” according to Kerry Chou, CCP, CSCP, a senior practice leader for WorldatWork. “With that, goals need to be set at a level where they are challenging but attainable.“

The composition and involvement of the design team, buy-in from sales managers through effective training and communication, and an effective goal-setting process all topped the list of the critical factors required to launch a successful sales compensation plan. These are the findings from the Sales Compensation Programs and Practices Survey from WorldatWork.

“It shouldn’t surprise us that when a sales compensation plan has an unsuccessful launch or execution, some of those same communication factors are revealed as lacking in this survey,” Chou said.

The data collected identifies why and how companies can avoid the plan implementation mistakes in the future. The most pertinent reason for an unsuccessful sales plan was failure to gain buy-in from sales representatives through training and communication, directly followed by gaining buy-in from sales managers. These are the same employees and managers who implement a good or bad company culture, Chou said.

“What this all boils down to is a lack of communication in less successful launches versus an open line of communication in the successful ones,” Chou said. “Constant and consistent messaging to both management and employees keeps all parties informed and allows for potential issues to be caught early on.”