5 Ways to Compensate Reps During Onboarding

Let's face it, getting your compensation plan right is a key factor to ensuring the success of your sales force as a whole. Not only is competitive pay the most important job attribute for attracting and retaining top sales talent, but how compensation plans are designed can also heavily influence how sellers approach important objectives for that year.

That being said, designing a compensation plan that's right for your organization is no easy task—especially when you are determining the base/variable split for new sales talent. Having a well thought out variable pay plan during onboarding is paramount to the success of your new sellers as it can have a tremendous impact on initial productivity. Good variable pay plans for use during onboarding will:

provide sellers with clear expectations and accountability at the beginning of their role.
acclimate them to variable compensation and how it works in nature should it be a new concept to them.
give them an early taste of what successful selling for your organization looks like.

The benefits of a properly designed plan don't stop there—they also promote success in the long-term by providing sellers with the understanding of what they will need to continue doing from an activities standpoint to hit their quotas.

Because some designs are more effective than others on a company-by-company basis, there's no one right answer when it comes to variable pay during onboarding. But recently on the Sales Ops forum, several members shared the following strategies for tackling this design challenge:

Variable pay tied to productivity metrics
Tenured rep incentive plans with reduced targets
Pay 100% commission for 90 days
90-days of guaranteed, non-recoverable pay
Aggressive 90-day MBO's

SEC Members, to read how organizations are using these approaches to pay reps during onboarding, check out our new Tailoring Variable Compensation: Peer Perspectives from Discussions page. In addition to variable pay during onboarding, it covers topics such as aligning rep/manager incentives and commissions for sales people that leave the company. Also be sure to visit our resource center on designing effective compensations plans.

So what does you compensation plan look like for new hires?