Being locked up at home for the past nine months has given me the time to watch some videos that wouldn’t have made the list in a normal year. The rabbit hole of streaming information recently brought me to a series of videos on triathlons. Watching a few of these events (appropriately sped up) reminded me of the power of a compensation philosophy.

Editor's Note: There are a lot of reward terms out there and they aren't always universally understood. Leave it to Dan Walter to illuminate this challenge with his Classic humor!

We all wish we were better at communicating. We create presentations (decks) and plan summaries (SPDs). We carefully choose our words and have our colleagues review things before sending them. Our efforts need to be understood by people with wide ranges of experiences, education and levels of interest. But what if our best efforts were making things worse?

Given enough Lego and you can build just about anything. Sales compensation is similarly simple, flexible, and potentially complex. Do you focus people on volume, quality of sales, profitability, growth, long-term builds? This list is nearly endless. How you motivate people to stay focused is similarly flexible. Do you use commissions, SPIFFs, spot bonuses, long-term incentives, quarterly goals, annual goals, team metrics, or individual achievement? Do you focus on granularity or stay tuned with the big picture? Any program requires buy-in from so many people and groups. The final result is something that people depend on to pay their own bills and keep their company afloat. Making small changes is simple, but real change is hard.

It’s time to be honest and evaluate what your talent acquisition team and managers are telling prospects and employees about their awards. Are you Tom Sawyer getting people to whitewash a fence or just one more employer looking to put another cog in the machine?

Most human resources and compensation professionals are peaceful people, but we are all fighting for talent. It often surprises me how many startups fight that war using the same tools and techniques as their larger combatants. There are, of course, rules that generally are followed, but they are few and relatively unrestrictive. When you are battling for the existence and success of the company that aligns with your passions and puts food on the table, perhaps you should consider not following the leaders. While cash is limited at startups, annual incentives can still exist and are compelling.

This is a short article about well-meaning but misguided short-term incentive plan design. When we ask business leaders to identify critical metrics for success, we often get two types of answers.

New year brings new opportunities in compensation. In 2022, we will get our feet underneath us, gather our balance and leap forward into a new approach to pay that may provide a foundation for the next ten years. There is no reason to wait. The future of compensation is yours to create!

It’s been a hairy year and it’s time to get out the combs and brushes. Break out your good scissors and clippers. I hate to be the one to tell you, but your compensation plans have “COVID-hair.” We get it. t’s been six months since the last time you sat in the chair of a professional and had your ‘do done. It may have been that long since the last time you covered your roots with someone other than an off the shelf solution.

Anyone who has taken a class or performed a Google-search on performance goals has learned about the concept of “SMART” goals. The most common breakdown seems to be: S - Specific, M - Measurable, A - Attainable, R - Relevant, and T - Time-bound. We all seem to know this and yet many still seem to have problems creating successful pay for performance programs. I would like to propose a new D.U.M.B. approach that celebrates the spirit of insanity.

Sales compensation is both the easiest and hardest of incentive compensation. Pay must drive specific behaviors, but it needs to avoid unintentional bad behavior. It must align with success at many levels, but provide ease of alignment for each individual. It must be easy to understand, but flexible enough to adjust to critical unpredictable factors. It must be painstakingly exact, while giving everyone some wiggle room to pay as required. Everything about sales compensation design is a compromise.

The funny thing is getting that little cavity or other problem fixed quickly usually doesn’t hurt and lets you focus on better things down the road. Compensation programs can often be the same.

Here’s a test for you, valued reader. Draw four columns on a piece of paper. In the first write the name of each compensation element. In the second write the purpose of that compensation element. In the third define what happens for the company if that purpose is met. In the last column define what happens if that element fails.

Then sit down with each member of your HR team, and then each member of the executive team. For each element ask them to tell you…

Actor Gene Wilder’s recent passing, along with a recent client call, reminded me Veruca Salt’s “I Want It Now!”. The song from Willy Wonka and the Chocolate Factory (the real one, not that lame version starring Johnny Depp.) As reminder, Veruca wants not only the goose’s golden egg, she also wants the goose itself. Mr. Wonka declines and chaos ensues. This seems to be an increasingly popular story in our tight job market.

The benefits of a single glass on an average day seem inconsequential. The benefits on a long, hot day are indescribable. Recognition programs are like drinking water. When you drink enough water, you feel better. You think better. You perform better. You even live longer. Drinking water is such a simple thing and perhaps that’s why so many of us don’t give it the attention it deserves. We know the benefits. We believe in the benefits. We have even experienced the benefits. We still don’t drink enough water.