From today’s mailbag: “My bonus and compensation plan makes no sense. I’m performing exceptionally well, but being paid less than peers who are on final warnings and I’m becoming very frustrated. What can I do?”
Carson: From the dawn of sales time, we have been paid on varying scales – sometimes high, sometimes low and sometimes we don’t even know.
When imperfect people use imperfect math to predict budgets and sales numbers with less accuracy than the already tough to peg stock market, you’re bound to come up with some oddities. Bonus and compensation are often created around initial expectations, but when they are eclipsed they rise. Let’s call it what it is: in sales, we are always chasing numbers. When we catch them, they are lifted higher and higher until we eventually cannot catch them. Once we fail a few times, we either lose heart or they are lowered until we hit them again and the cycle continues.
I’ve worked in situations where initial goals were low – we annihilated the goals and broke the bank for quite a while until that plug was pulled. I’ve worked in situations where my team did so well that with smaller territory than a peer I had nearly three times their objective… and my team was still hitting it and they weren’t.
In essence, there is no rhyme or reason, but you are rarely going to encounter a supervisor or leader who is going to admit that. Even applying the most methodical of systems to set targets is still going to meet its exceptions. I’ve also been a top performer who was compensated less than under-performing peers for that very reason – because the compensation structure just didn’t make sense.
The real trick of this trade is patience. I’ve found it almost best in some of these situations to go in with minimal expectations for bonus and be pleasantly surprised when you perform well on their scale. You will be confounded and frustrated if you try too hard to comprehend the incomprehensible. It’s like a case that even Sherlock Holmes cannot crack; you’re up against fuzzy math and attempts to apply rules to unequal peers.
See, that’s where the real trouble lies. When different geographies and customer bases and situations come into play, the number of variables make it literally impossible to truly predict your proposed performance. Sure, it’s good to have goals, but if I’m not getting the same exact lot as my peer it’s instantaneously not an even playing field. Sure, the margin of error can be minimized, and odds and probability and some luck come into it, but the thing of the matter is bonus structures can be manipulated and milked and they can be made nearly impossible – seldom in the sweet spot in between.
(1) Learn the different buckets that you are accountable for. What are the items that you are paid out on? What are the ways you can perfect your process in each of these metrics? Like any facet of selling, it all comes down to your comprehensive effort in all areas – not just revenue, but attachment and any other metrics that matter.
(2) Be consistent with your process, no matter what. You are going to have months or quarters or years where everything is going your way and you crush goal. You may break the bank and make an incredible bonus. But realize that you will likely pay dearly for that with a month or quarter or year without making near the same bonus – they will level you out. Keep approaching your role the same way because only if you are doing the proper process can you maintain a good chance at some semblance of a bonus and average out in an acceptable fashion. We may not achieve the same percent to goal month to month, but over the long haul we are compared to others who are up against similarly imperfect goal structures. We often compete quarterly and annually, so keep aiming as high as possible.
(3) Be patient. Often in situations where the compensation structure is tough to decipher, given additional time, more historical data can be accumulated and more accurate goals can be fleshed out. Companies and divisions realize metrics that matter and some that don’t matter so much, and they will tinker with what pays out. Play the game long enough, become strong enough at what you do and you can beat the house. You’ll lose your fair share of months, you’ll appear on paper and get paid less sometimes than those you dwarf in results, but – over the long haul – you do come out ahead. Don’t lose heart.
Remember that the only reason your compensation structure isn’t perfect is because it’s compounded by imperfect processes created by imperfect humans using imperfect extrapolations and imperfect amounts of data. Given time, given patience and given your continued striving for excellence, you’ll break the bank more often than you’re busted by it.
Carson V. Heady posts for “Consult Carson” serving as the “Dear Abby” of sales and sales leadership. You may post any question that puzzles you regarding sales and sales leadership careers: interviewing, the sales process, advancing and achieving. You will also be directly contributing to his third book, “A Salesman Forever.”
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Carson V. Heady has written a book entitled “Birth of a Salesman” that has a unique spin that shows you proven sales principles designed to birth in you the top producer you were born to be.
If you would like to strengthen your sales skills, go to http://www.amazon.com/dp/B00ICRVMI2/ref=cm_sw_r_tw_dp_yGXKtb0G28TWF