Many of you are familiar with “Dear John” letters, which are typically sent to a sweetheart serving in the armed forces, breaking off a relationship with their partner back home. In today's modern world, we've taken the initiative to draft a “Dear John” letter addressed to that financial person at corporate, the one responsible for calculating and distributing bonuses. Dear John, I hope this finds you well, and I hope in time we can be friends, but I’ll get straight to the point. This relationship isn’t working any longer. A guy cannot expect a girl to wait around forever for a bonus. The fiscal year ended back in December. It’s April, and I still haven’t received so much as a statement from you. You’ve been so opaque. I may not have a degree in Math, but I can balance my checkbook. Surely, by now, you know the numbers and the results! It was bad enough when I couldn’t figure out the exact math and bonus structure. What’s worse is you are dragging your feet while I hear throug...

Spring Cleaning Your Compensation Plan: As we inch closer to summer, let’s discuss cleaning up your compensation plan. Huh? What does my organization’s compensation plan have to do with spring cleaning? The ritual of reviewing and editing your stuff, cleaning everything thoroughly, ensuring your lawnmower is ready to go, and starting fresh with the season makes sense. It keeps our homes and garages in good working order and feels good when it’s done. We should bring the same discipline to our compensation plans. Our human resource strategy and execution demand it. How you retain and recruit ideally aligns with your overall organizational strategy. Much of how your strategy adapts with the times, so should your compensation plan.  Why now? You have likely finished communicating goals, and your bonus plans to your teams. It’s not yet time for a mid-year review, so dust off your most recent comp plan, and get started. It’s important that you know how your pay scale aligns with the ma...

In case you haven’t noticed, we have been doing a lot of research on the topic of commission-based compensation plans.  During the discussion, topics from Daniel Pink’s Drive, The Surprising Truth about What Motivates Us keeps coming forward.  I recently re-visited parts of the book and wanted to share a few points to further ramp up the discussion of the matter.   The common belief is summarized by Pink this way:  “Rewarding an activity will get you more of it. Punishing an activity will get you less of it.”  This certainly falls in line with the sentiments of distributor managers.  When we asked the question,"Why do you employ commissions with your sales department?" the answer came back to drive both quality and quantity of effort (in that order.)  One-on-one examination of many plans revealed instances where distributors had applied greater rewards for selling select groups of products as well as rewards for selling into poorly performing or in...