Are Sales Managers Being Left Out of the Sales Compensation Loop?

Sales compensation plans undergo frequent change these days; 76% of respondents in a recent study say their plan is revised either every or every other year, with 65% indicating that a plan revision occurred in 2008.  And yet many organizations appear to be leaving first line sales managers out of the loop at launch time.

New research from WorldatWork and the National Association of Sales Professionals, featuring over 400 participating HR, compensation and sales professionals, indicates that nearly 40% of the responding organization do not appear to have a clear strategy or approach for preparing first-line sales managers to manage the launch of a new or revised sales compensation plan.  In fact, 14% of the respondents say that they bypass sales managers and go directly to sales employees when communication new pay plans.

To me this is symptomatic of a bigger issue surrounding sales compensation and sales management.  Because of the heavily leveraged (read low or no base, high incentive or commission) pay plans for most sales people, there appears to be an underlying assumption that the pay package will, and in fact should, manage the sales people for us.  This can be (and often is) an issue with any incentive plan, but it makes a more acute appearance in the realm of sales incentives.

I see it frequently when I participate in sales compensation design team discussions, where we are constantly battling the urge to have the plan address each-and-every-possible-desired-behavior-or-outcome, until the plan threatens to collapse under its own weight.  As if the sales managers themselves have no role or authority to deal with performance questions or challenges.

And maybe they don't.  But that - our apparent failure to capitalize on the role of sales managers in driving sales performance - seems like a pretty big oversight to me.

Readers, are you seeing this trend in the organizations where you work and/or consult?  What are your thoughts?