Sales Pay Plans Written By Non-Sales People


It’s not uncommon for Clients to ask me to review their Sales Pay Plans. Often, this involves making changes and additions to what’s already written, to make it an effective and productive program for everyone involved. Nearly as frequently, though, this requires me to write whole new sections that are just plain missing. Thankfully, it’s a rare occasion for me to come across a section of a pay plan that needs to be excised completely. That did happen recently, however, when I came across a clause in a Client’s pay plan entitled “Windfall Business”. Here’s how that clause read:


“To provide for those unusual occasions when business achievement is realized through little or no effort on the part of a Participant, the Company reserves the right to declare such business a ‘windfall’. Windfall business is subjected to special treatment. Such treatment will be handled at the sole discretion of the Plan Administrator.”

I’m thankful that, when I first read this clause, I wasn’t in the presence of the Client. No doubt, my reaction was visible and it probably wouldn’t have been good for our relationship for them to see that. At first, I wondered what could have motivated such a position. Then, I wondered how my Client could have permitted it to be embedded in their pay plan. Finally, I decided that neither of those considerations should be my immediate concern. I had been introduced to this Client under the auspices that “they need a guy like (me) to turn their Sales around.” So, regardless of the answers to my “what & how” questions, I knew that their “Windfall Business” clause was a counterproductive element for Sales. They needed to understand that clearly and immediately. Here’s how I went about getting that done:

I, simply, shared with them some of my background in helping to develop Sales People. What I told them was: ”I’ve had occasions where, fairly early on in their efforts, new Sales People would have a stroke of good luck and close some significant business more quickly than they expected. In these cases, it wasn’t uncommon for the Sales Person involved to express some guilt, that they hadn’t really earned the sale. My consistent response in these instances was to tell that person that all Sales People get their share of luck … some of its good and some of its bad. You’re going to get your share of bad luck so, when you get some good luck, enjoy it and don’t feel guilty.” That was really all it took. From that, my Client recognized that their “Windfall Business” clause allowed Sales people to keep their bad luck but they didn’t necessarily get to keep their good luck. They agreed to remove the “Windfall Business” clause from their pay plan.

You may be interested to know that, in discussing this matter with my Client, I did learn the answers to my “what & how” questions. The answer to ”What could have motivated such a position?” was that it was a clause developed by an HR Consultant. The answer to “How my Client could have permitted it to be embedded in their pay plan?” was that they’d payed the HR Consultant for their advice and the Client felt they should follow the advice they’d paid for. In both cases, it’s an indication that both the HR Consultant and the Client don’t “get it” when it comes to what I called the “legitimacy to the Sales function in business”, in an earlier article entitled “The Pride and Prejudice of Sales“. And, I have to admit, with something like this; it may require a person who has Sales experience to “get it”. To many, who don’t have Sales experience, it may even seem to have a certain logic to it. And, that’s why I think my Client’s erstwhile “Windfall Business” clause is a great example for my point in this article:

In order to establish a Sales Pay Plan that’s effective and productive for everyone involved, don’t have it written by Non-Sales People!

What’s your experience been with Sales Pay Plans along these lines? Do you have other good examples to share? Do you agree with my perspective on the “Windfall Business” clause? Please let us hear from you, to benefit others through the experience you’ve gained!