Eliciting the best performances out of employees in a competitive workforce is the hope of every business owner, CFO and supervisor. Using a commission plan can be the most effective way to achieve this result by keeping employees motivated and invested in the company’s success. Many companies now turn to commission software, which can make finding a delicate balance in an employee payment program much easier. Below are three things to consider when developing a compensation program. Consider commission When considering commission plans, it is important to remember that good employees are hard to come by. As business owner Jay Goltz writes for The New York Times, compensation programs based entirely off commission might attract some risk-taking go-getters, but it might also drive away effective salespeople who are looking for stable work. Commission is about motivation, not working out of fear. A more reasonable plan includes base pay plus commission, which attracts effective candidates who will still strive to meet their goals to bring in lucrative commissions. Communicate with employees In a sales-driven environment based on commission or bonuses, communication is key. Communicating how much money a sales rep will earn by closing on an account is important to implementing an effective compensation plan. Emedia Vitals explains that clear communication and hard dollar amounts serve as an instant motivator to keep going with difficult accounts. When an employee feels ready to give up on an account out of frustration, the clear promise of a commission will help them keep going. Making it SPIFFy Sales Promotion Incentive Funds (SPIFF) are a great way to motive employees to do their best work. SPIFFs are limited-time offers for employees to reap extra benefits. An example of this would be rewarding an employee $500 for being the first to sign a client to buy a new product. Budgeting extra money for these types of incentive programs can help pull an office out of a sales slump and keep employees on their toes.
