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Complexity is a frequent challenge with incentive plans, particularly (but by no means exclusively) in the arena of sales compensation.
Complexity enters the picture for a number of reasons. Sometimes, for sure, a certain degree of complexity is necessary simply to achieve balance, so that no one dimension of performance is given too much ballast at the expense of other important behaviors and results. Other times, however, it boils down to a reluctance to stick a stake in the ground and take a strong stand.
I was struck by the following statement while reading a recent publication by Jerry Colletti and Mary S. Fiss.
Simplifying plans requires courage
In making their point, Colletti and Fiss note:
Most plans could be designed with up to three measures in mind. Often the reason they are not is because there is an unwillingness to sort, prioritize and discriminate relative to optimal performance results.
So true. And not just in sales compensation design, but in reward programs overall. Committing to a few measures is a powerful thing. In essence it involves leadership saying to the troops: “This is what’s most important right now.” Leaders are often reluctant to do this, preferring to leave things unsaid, distinctions not made, options left open. Sometimes for valid reasons, but often not.
Reward plans speak, however, and a plan filled with metrics and contingencies says this: “We have no idea what is important so JUST DO EVERYTHING for heaven’s sake!”
Take a look at your plans, particularly as the annual review and renewal times comes upon us. Is the complexity you find necessary and appropriate, or could it reflect a lack of courage and conviction?
Creative Commons image “BulboxZoomb8”” by ellenm1
This post originally appeared on Compensation Force
Author: Ann Bares