In today’s competitive employee marketplace, effective communication of your total rewards package can help be the determining factor in securing high performing employees.

A total rewards program is made up of several elements including compensation, benefits, recognition, performance management, talent development, and work-life effectiveness. There is much to consider when developing and understanding complicated rewards programs. That’s why it is so important to communicate them effectively.

Here are some elements of communicating rewards.

Include All Elements

It’s a mistake to communicate only compensation or pay elements of the reward package. As noted above, rewards include other elements than just compensation. Employees often have the mindset that they are doing a job and their organization is paying them to do it. They overlook the other investment their employer is making in them.

So highlight what your company is doing to support their employees other than just what they receive in their paychecks. As a result, if employees recognize what their company is doing to support them, there is a better chance that they will feel a greater emotional connection to the organization.

Bring it Down to a Personal Level

Start the conversation or presentation with more general items. Lead with a discussion of the organization’s business strategy and culture and show how the rewards programs support that strategy and culture. Explain the company’s human resources strategy and how compensation philosophy is an integral part of that strategy. Then discuss how individual employees are part of the overall strategy and culture and how they contribute to that strategy.

Be Rigorous About Details, Documentation, and Data

Each organization has preferred levels of transparency. But continue to tie communications to the company’s compensation philosophy. Explain how, when, and why the company makes decisions as it does, and plan to talk about them regularly, from one-on-one conversations to all-hands meetings. Outline your approach to gathering and analyzing data, which both provides clarity and ease any suspicion that there is bias at play.

Leave no ambiguity as to how individuals can increase their earning potential. And provide a total rewards statement, whether it a report you generate from your compensation software or a simple spreadsheet or word document. Create a report that lists the rewards each employee receives.

Provide Manager Training

Managers are the front line for explaining and administrating compensation. It’s often their decisions that affect salary increases and bonus/incentive payments. They need to be confident about having tough conversations about pay with employees. So arm them with details to explain the organization’s programs and the information need to back up their decisions.

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It’s Review and Planning Time

In this issue of the Salesforce Alert newsletter, my colleague, Tim Weizer, presents some key questions that need to be answered in reviewing a salesforce incentive plan.

The Sales compensation review and planning season is upon us. The focus on sales compensation is understandable as selling is, by far, the most expensive part of strategy implementation for most companies.  Five times the expenditures on all media advertising; 20 times larger than the money spent on all online marketing and advertising in 2013.

Here are some questions to ask.  Focusing on these areas can help determine whether you have areas of concern.


In today’s fast paced world, quality often is not given enough emphasis over a quick answer.  A holistic approach is needed to ensure that proper time and thought are given to plan design and any potential unintended consequences. As one CEO remarked that the company took its time to ensure “…we didn’t have sales compensation becoming disconnected from the overall financial result of the business.”  The CEO wanted to ensure that the company was paying for the right strategic results.

The basic premise is that a sales compensation plan does not exist in a vacuum.  It needs to be closely aligned with the company’s business and marketing strategies and goals.  Also, the plan must address both internal and external forces impacting the sales job and selling process.


Setting the same percentage of base salary as the incentive for target performance for all sales positions is often evidenced in plans.  This may be a serious mistake.

Careful sales job analysis should be undertaken to properly reflect each position’s impact and influence on a sale.  This analysis then becomes an important part of determining the right pay mix per sales role in your company


When the design allows too many sales reps to max out on incentive earnings, the CFO may be anxious about the inherent risk in the plan’s design or to “pushing” fourth quarter sales into the first quarter of next year.   While 60 percent of the salesforce should achieve quota or above, a recent survey stated that only 4 percent, on average, maxed out.  If your result is significantly higher, then multiple analyses should be conducted to determine the reasons (e.g., Quota and territory design analyses).


While communicating management’s goals to the field, too many measures or objectives result in the measures receiving little or no attention.  Four should be the maximum number of incentive measures.  This statement is backed up by a Hay Group survey of 700 companies that reported 85 percent of respondents had 4 or fewer incentive measures. Also, any single incentive measure or objective accounting for less than 15 percent of the targeted incentive opportunity is simply wasted. A good idea would be to review the actual percentage of your salesforce that achieved 100 percent or more of quota per measure.


To quickly increase sales, a company may decide to provide a higher leverage of incentive to total cash or an uncapped incentive opportunity versus the past design.  This action may produce significant risks in terms of cost control, uneven production scheduling, or even upset key customers due to delivery issues.


New Revenue Recognition Standard requirements go into effect on December 15, 2017 for public companies and the end of 2018 for private companies.  Companies in industries such as Aerospace and Defense, Automotive, and Engineering and Construction are likely to be impacted given their use of long-term contracts. Take a moment now to ask your CFO if ASC 606 impacts your sales compensation plans.  If so, find out what data the CFO needs from you to address this topic. Also, investigate if the timing of incentive payments may need to be adjusted.

To learn more or discuss your sales compensation concerns, please contact Tim Weizer at or Neil Lappley at