Compensation Plans That Ignite Your People

How can you get the very most out of every manager that works in your organization? What can you do to push past mediocrity and get your team cranking out amazing results? Assuming your culture, vision, values, and goals are in place and clearly communicated to your team, the one thing you lack is a compensation plan to fire up your team.

As I look back on the evolution of my company, a strong correlation emerges between increasing profit margins and performance based compensation plans. For years, the only team members in our company to receive a portion of their compensation based upon performance were sales. Every other manager had a base salary and then received an arbitrary bonus at the end of the year based upon the available cash in the bank. What I didn’t realize at the time was that I was sending signals to my team that results didn’t really matter. My words suggested that results mattered, but my compensation plans (another form of communication) spoke otherwise.

One only needs look at the government to see how the best of intentions can bring about unintended consequences by sending unspoken signals via incentives. One of the many faults of socialist governments is the assumption that man is inherently good (or at least not inherently bad) and will always do what is right. So when they strip away incentives to work hard or take responsibility for this or that thing, these governments assume the people will continue to work hard and take responsibility. But we all know how the story ends. By stripping reward from work, output slowly declines. By seeking to lift up all, the government creates a perverse system that eventually becomes unsustainable.

Your company and your team members are no different. People are wired to want to see reward for their efforts. They need goals, a plan to reach those goals, and incentives once they get there. At my company, one of our values is a “self employed mentality.” People thrive best when they are treated as mini-business owners. They want responsibility, success, and reward. The creator has hard-wired us all this way. Therefore, our job descriptions and compensation plans should reflect this reality.

Your job as a leader is to identify what success looks like, select several measurable criteria that define success, and use these for job descriptions and compensation plans. Help your team members understand what success looks like and then reward them for achieving it. In this way, you create happier employees and you drive your company constantly toward more and more success. It truly is a win-win scenario. Additionally, such job profiles make for a replicable business model that allows you to scale up your company. So what are you waiting for? Change how you lead your team. Get them fired up and shooting for success!


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