Today, Dan Goodman with Dan Goodman Employment Advisory joins us on the Systematic Selling Podcast.
I started following Dan on LinkedIn a couple of months ago because of his compelling, heart-wrenching stories about high-performing sales reps getting let go by employers who didn’t want to pay the enormous “windfall” commissions or bonuses.
Dan helps those jilted sales reps navigate the shark-filled waters to reclaim the compensation they’ve earned and deserved.
I invited Dan to join us to talk about the factors founders should consider for setting up sales rep compensation for success—for both the company and the rep.
What are the keys to developing fair and effective sales compensation plans?
What are the compensation pitfalls to avoid?
Get ready to take notes as Dan and I discuss the importance of transparency, communication, and ethical practices in sales compensation on Episode 18 of the Systematic Selling podcast!
Key Takeaways:
Compensation Plan Design:
Create tiered structures that incentivize desired behaviors
Balance rewards for legacy products and strategic, high-growth offerings
Consider uncapped plans to motivate top performers
Run scenarios to anticipate potential outcomes.
Trust and Transparency:
Communicate openly about compensation plans and changes
Avoid retroactive changes or delaying plan publication
Honor agreements made with sales reps
Provide access to data for commission verification.
Legal and Ethical Considerations:
Non-disparagement agreements in severance offers are no longer allowed (NLRB ruling, February 2023)
Non-compete agreements are facing potential bans (FTC ruling, implementation pending)
Be aware of laws surrounding variable compensation.
Handling Economic Challenges:
Involve sales reps in discussions about necessary changes
Consider alternatives like equity grants to offset commission losses
Leadership should make sacrifices alongside employees
Provide options and the right of refusal to affected employees.
Building a Positive Culture:
Treat sales reps with respect and dignity
Focus on long-term sustainability over short-term gains
Recognize the value sales reps bring to the company's growth
Avoid ego-driven decisions that undermine trust.
Additional Notes:
The podcast emphasizes the importance of "impeccable trust" in sales relationships.
Dan shares his journey from free consultations to a thriving advisory business.
The discussion touches on the evolving landscape of employment law and worker rights.
Sean and Dan stress the need for founders to take responsibility for company performance rather than scapegoating employees.
Contact Information:
Website: dangoodmanea.com
Email: dan@dangoodmanea.com
The Bottom Line:
This episode is a must-listen for founders and sales leaders looking to create fair and motivating compensation plans while fostering a culture of trust and respect within their companies.
Additional Resource:
Check out our new book, Collaboration Effect on Profit: Overcoming Founder’s Syndrome to Achieve Sustainable Success, here.
Until next time!
Sean
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