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People Perform According to How They Are Paid

Everyone Has a Number .

Recently I had a conversation with the CEO of a large media/advertising company. We talked about using compensation plans as a way to build confidence and trust between the company and employee. Brief synopsis below (cliff notes version):

People are motivated by different things.

As leaders within a company — we need to realize this to get the best out of each person.

What are the shared and mutual goals between the rep/company? As the rep does well — the company should as well. But what does this mean?

Let’s be proactive and find out what makes an employee tick. Are they trying to just pay the rent? Or do they have their eye on a new Model S?

Structure a shared plan around these common goals. Numbers should be based on employee financial goals and company goals. Provide a plan for each person (HR may complain and have to get creative) but look towards something custom for each employee. This can be really rewarding. (Scott Leese talks about this in his book — Addicted to the Process)

Also at this particular CEO’s company -everyone has a number by their name. He remarked that this is an easy answer to the recurring question of “How am I measured?”

Whether you are in marketing, success, support — he believes all employees should have some skin in the game and reward for doing so. Numbers should be based on both employee’s financial goals and the company’s goals. Provide a plan for each person (HR may complain and you may have to get creative). Custom for each employee can be really rewarding.

(Plus — Jeremey Donovan says that experienced salespeople negotiate their quota — so you likely are already customizing plans anyway).

If there are issues with performance — look at the compensation model and see if they are incentivized properly?

As you look to structure or tweak your compensation models — don’t be shy to customize models, quotas and plans for each person. Because people perform to how they get paid.

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