Labor & Employment Law

Bad Job Design Is The Cause of Many Bad Sales Compensation Plans

We have previously blogged about some of the ways in which a bad sales compensation plan can result in legal liability.  However, as Ann Bares points out in her Compensation Force blog, many bad sales plans are caused by vague or ill-defined job responsibilities. 

Sales jobs that require constant shifting from prospecting to account management to order administration/tracking to installation/set-up and then back to prospecting may not be the best use of your available sales talent. Particularly if you've staffed the jobs with hunters. And, for a profession where variable pay can be a significant piece of the overall compensation package, jobs like this can present real challenges for sales incentive design.

Ann's analysis strikes me as generally correct.  Thus, at the risk of overstepping our area of legal expertise and venturing into management advice -- if an employer finds itself with a compensation structure that is convoluted, difficult to administer, and perceived as unfair, it should honestly consider whether the source of the problem lays with its management rather than its sales force.

Full post as published by California Labor & Employment Defense Blog on October 21, 2008 (boomark / email).