Companies are facing extraordinary challenges and being tested in ways that deeply impact standard operations and financial planning and expectations. While these impacts may be unique to each industry and company, we all have three things in common – customers, communities and our valued workers. Many companies are enhancing their current compensation plans to better adapt to this new economic climate.
Iconixx Client’s and Pandemic Impacts on Compensation
Below is a sampling of business challenges and thoughtful remedies from our family of clients.
“Our retail company had to shift from face-to-face sales to an ecommerce model switching from a focus on sales staff to online order fulfillment. Challenge – Shift our traditional sales strategy to a new model to maintain staffing levels while we incentivize and motivate a completely different type of sales engagement.” – Large Education and Learning Company
“Our recurring revenue streams are being impacted in the short-term, making it necessary for our business to pivot from standard operations to a more loose, performance and outcome focused business. This change will require compensation plans with performance-based quotas connected to lower sales thresholds. Challenge – How can we gain forecasting visibility into these comp changes to enable us to communicate compensation ranges, while accurately managing appropriate thresholds?” – Global Telecommunications Company
“Our organization is considering leveraging a PTO benefit to mitigate loss of pay for employees. Challenge – How can we determine actual costs related to these benefits and ensure we pay out accurately and quickly?” – National Online Publisher
Overall, Iconixx clients seek guidance related to their flexibility for quick changes and visibility to forecast the cost related to these new methods of compensation. The Iconixx Customer Success team always works closely with each request to ensure the changes requested will net the results and achieve the overall corporate objectives of each customer.
While many companies may have no choice but to reduce workforce, Iconixx is partnering with our customers to uncover creative ways employers may manage their compensation strategies during this unique time with more positive outcomes. Those outcomes intend to preserve a company’s most valuable asset – highly trained, experienced employees.
How to Modify Compensation Plans to Adapt to These Unique Times
This is a hot topic right now with businesses that are experiencing a rapid decline in sales, and for others whose sales have shot off the charts. Both situations can blow up the established sales incentive plan. So what are the options during this crisis, and even during a potential recession?
Motivate and Engage Your Team
- Modify payout curves – Lower or even eliminate minimum threshold requirements. This won’t set any records but it will allow your team to stay in the game.
- Quotas – Reset the bar to maintain engagement but to reflect the current sales climate. Of course, you add qualifiers that kick in with the return to normalcy (define what that means), quotas will be reset.
- Reward based on relative performance – You can rank and grade on a curve.
- Sales contests – This may not work for some businesses, but it can for others. Create a short burst that motivates and rewards.
- Incorporate recoverable and non-recoverable draws – Re-balance towards a more short-term subsidized compensation.
- Connect more pay to corporate results – We’re in it together!
- Capping incentives – Sales incentives should reward for contribution, not outside events that drive the numbers.
It is our hope this information has been useful to you and to your business. As always, your input or any questions you may have is appreciated. You hear “we’re in this together” everywhere these days – and that’s a good thing. We have conducted our business with that in mind for years, and we’re not slowing down now.
We all know this time will pass. Please keep in mind, we feel a deep responsibility to our family of clients to keep business moving forward. Let us know if we can help support your team’s compensation planning efforts.
ABOUT AUTHOR: Elliot Green, Iconixx Configuration Manager – Elliot is highly skilled in all aspects of enterprise incentive management and the software development life cycle. His 14 year tenure with Iconixx includes business process modeling, requirements engineering, analysis and design, development, and quality assurance.