Working the Comp Plan

Read­ing Time: 4 min­utes

We’re adding a lit­tle some­thing to this mon­th’s sales con­test. As you all know, first prize is a Cadil­lac Eldo­ra­do. Any­body want to see sec­ond prize? Sec­ond prize is a set of steak knives. Third prize is you’re fired.


In a pre­vi­ous life, I worked as a pre-sales engi­neer spe­cial­iz­ing in net­work restruc­tur­ing. As such, I was attached to the sales orga­ni­za­tion, and always par­tic­i­pat­ed in sales con­fer­ences, meet­ings, etc. I was paid a base salary, plus had a comp plan for bonuses–though I had more of an 80/20 split in salary/bonus poten­tial, where­as the sales folks had a more tra­di­tion­al 30/70 or so split.

Every year, right after the hus­tle and bus­tle of the hol­i­days had set­tled down, the same drill would begin again for the new year: the fore­cast­ing and asso­ci­at­ed com­pen­sa­tion plan roll-out. Luck­i­ly enough, this was usu­al­ly some­where nice, like a posh resort in Scotts­dale, so I did­n’t real­ly mind much. Of course, I also had a lit­tle less on the line than the true sales folks since most of my bonus split was based on the entire region in total, and not on a par­tic­u­lar ver­ti­cal mar­ket or small ter­ri­to­ry.

Inevitably, after the glow of the open bars, sun­shine, expen­sive din­ners, and golf out­ings had died down, real­i­ty would sink in. No one would make as much as the leg­endary (and usu­al­ly fic­ti­tious) rep from last year who had land­ed the big whale account; we’d all be lucky just to make the mort­gage pay­ment. Some peo­ple would talk about leav­ing and oth­ers would just wor­ry.

Then there were the expe­ri­enced reps; the ones who had been around for a few years or more and under­stood the game. Sure, they may have a com­plaint or two about the fore­cast­ing num­bers or some­thing, but they large­ly weren’t flip­ping out like the new guys. If you asked them why, or what their secret was, the answer was one you’ve heard before: work the comp plan.

Let me explain. Osten­si­bly, the com­pa­ny sales lead­er­ship has crys­tal­ized the strat­e­gy for the next year into goals, tar­gets, etc., based on what’s been deemed to be impor­tant or crit­i­cal for suc­cess, down into spe­cif­ic tar­gets for each ter­ri­to­ry and sales rep. They have decid­ed how much to pay in bonus mon­ey, sales mul­ti­pli­ers, etc., based on this. The stuff that was less impor­tant would be paid less lucra­tive­ly.

Hence, the expe­ri­enced sales peo­ple would most­ly ignore what­ev­er speech­es, mem­os, or strat­e­gy dis­cus­sions came from the mouths of the lead­er­ship team, and instead focus like a laser on how they were being paid: the comp plan. I get a 10% for sell­ing ven­dor X’s prod­uct, but only 5% for ven­dor Y? Then Ven­dor Y does­n’t exist for all intents and pur­pos­es. Work the plan.

This usu­al­ly had the pre­dict­ed out­come, of course, with goals and com­pen­sa­tion wild­ly swing­ing from one extreme to the oth­er as tar­gets were hit, missed, or wild­ly exceed­ed. Often the com­pa­ny would have to per­form some sort of course-cor­rec­tion mid-year to over­come the errors made man­i­fest in a sys­tem like this. Through it all, the vet­er­ans would smile and keep “work­ing the plan” as the younger, new­er folks burned them­selves out try­ing to keep up.

Why do I bring this up now? As the head of IT at a com­pa­ny in the enter­prise space, I’m not sell­ing any­thing, at least not in the tra­di­tion­al sense. I still have cus­tomers, how­ev­er, and I still have a bonus struc­ture. In fact, we just fin­ished up this process inter­nal­ly and so this was all on my mind.

You would expect that my goals–and those of my team–would be based on crit­i­cal com­pa­ny goals, dis­tilled and crys­tal­ized over many plan­ning ses­sions, with a lot of thought behind them, right? You would think that, yes, but you would be wrong–or at least par­tial­ly wrong.

Some­times, in both the VAR world and the enter­prise or ISP spaces, the gap between the high-lev­el com­pa­ny goals and the indi­vid­ual depart­ments’ goals get run through a blender of sorts (will it blend?). High lev­el com­pa­ny goals of “max­i­miz­ing share­hold­er val­ue through increased par­a­digm-shift­ing cloud strat­e­gy” sounds great if you’re a recent­ly mint­ed MBA get­ting paid by the word, but it trans­lates into exact­ly as much gib­ber­ish as you’d expect by the time it gets to be time to make it an action­able met­ric. So, you get ran­dom goals and projects as your key met­rics instead of a more mea­sured and appro­pri­ate met­ric.

For instance, as the guy in charge of IT for the entire company–world-wide–you might expect that a major goal of my team and I would be… uptime. It’s a fair­ly stan­dard mea­sure­ment of how reli­able the over­all archi­tec­ture of the net­work is, and it’s rel­a­tive­ly fair and has the ben­e­fit of being easy to quan­ti­fy. Do I have uptime as any kind of met­ric this year? No. In fact, most of the goals I have are spe­cial projects that pull in stake­hold­ers from oth­er parts of the func­tion­al side of the busi­ness, but very few are actu­al, real, quan­tifi­able IT met­rics.

I asked about this and was told that that “oth­er stuff” just goes with­out say­ing. When I asked what things dur­ing the year, and at the end of next year, would con­tribute to any pos­si­ble bonus­es, rais­es, and good reviews I was told that the goals are the met­rics by which my team and I will be assessed. All of that redun­dan­cy stuff? Nope. All of that failover, uptime, increased effi­cien­cies, low­er staff hours, quick­er help-desk res­o­lu­tion? Nope.

So why am I still smil­ing? Because I’ll be work­ing the comp plan.