compensation strategies michael schmidtmann
DESCRIPTION
How do you find the right balance between base and incentive compensation? How much risk & reward should your salespeople and engineers have? Are you overpaying your people? This session provides a basic overview of the key elements of incentive compensation, and reviews the decisions you need to make in order to craft optimal plans for your company. You will learn the wide variety of plans offered in our business, with best practices taken from hundreds of Solution Providers across North America. •How to craft offers to attract talent •What compensation metrics are important, and how yours compare •Incenting the right behaviors This session is led by John Gaillard and Mike Schmidtmann, who work with Solution Providers across the country to grow their businesses and improve profits.TRANSCRIPT
![Page 1: Compensation Strategies Michael Schmidtmann](https://reader038.vdocument.in/reader038/viewer/2022110121/558c1f1bd8b42aa2528b47a0/html5/thumbnails/1.jpg)
Presented byMike Schmidtmann
John Gaillard
Compensation Strategies
Get Results without Overpaying
![Page 2: Compensation Strategies Michael Schmidtmann](https://reader038.vdocument.in/reader038/viewer/2022110121/558c1f1bd8b42aa2528b47a0/html5/thumbnails/2.jpg)
What Happens when you Change
Compensation Plans?
![Page 3: Compensation Strategies Michael Schmidtmann](https://reader038.vdocument.in/reader038/viewer/2022110121/558c1f1bd8b42aa2528b47a0/html5/thumbnails/3.jpg)
Top Executive and Engineer Found a New Company
![Page 4: Compensation Strategies Michael Schmidtmann](https://reader038.vdocument.in/reader038/viewer/2022110121/558c1f1bd8b42aa2528b47a0/html5/thumbnails/4.jpg)
![Page 5: Compensation Strategies Michael Schmidtmann](https://reader038.vdocument.in/reader038/viewer/2022110121/558c1f1bd8b42aa2528b47a0/html5/thumbnails/5.jpg)
We are doing great. How come we don’t have any money?
![Page 6: Compensation Strategies Michael Schmidtmann](https://reader038.vdocument.in/reader038/viewer/2022110121/558c1f1bd8b42aa2528b47a0/html5/thumbnails/6.jpg)
“Let’s sell our way out of this. Marketing. Leads. New People.”
![Page 7: Compensation Strategies Michael Schmidtmann](https://reader038.vdocument.in/reader038/viewer/2022110121/558c1f1bd8b42aa2528b47a0/html5/thumbnails/7.jpg)
“Help!! We are about to run out of cash.”
![Page 8: Compensation Strategies Michael Schmidtmann](https://reader038.vdocument.in/reader038/viewer/2022110121/558c1f1bd8b42aa2528b47a0/html5/thumbnails/8.jpg)
Our sales and margins are great. Where’s the problem?
![Page 9: Compensation Strategies Michael Schmidtmann](https://reader038.vdocument.in/reader038/viewer/2022110121/558c1f1bd8b42aa2528b47a0/html5/thumbnails/9.jpg)
Sales Compensation: 33.7%
Sales Manager: 6.4%
Expenses & Benefits: 7.2%
Admin & Inside Sales:3.1%
Marketing & Lead Gen: 5.3%
Pre-Sales Engineering: 3.5%
Total Cost of Sale: 59.2% of GP
![Page 10: Compensation Strategies Michael Schmidtmann](https://reader038.vdocument.in/reader038/viewer/2022110121/558c1f1bd8b42aa2528b47a0/html5/thumbnails/10.jpg)
How did we get in to this mess, and how do we get out of it?
![Page 11: Compensation Strategies Michael Schmidtmann](https://reader038.vdocument.in/reader038/viewer/2022110121/558c1f1bd8b42aa2528b47a0/html5/thumbnails/11.jpg)
Compensation Metrics
& Tools
Aligning Incentives &
Strategy
Best Practices
![Page 12: Compensation Strategies Michael Schmidtmann](https://reader038.vdocument.in/reader038/viewer/2022110121/558c1f1bd8b42aa2528b47a0/html5/thumbnails/12.jpg)
What is Your Biggest Compensation Problem?
![Page 13: Compensation Strategies Michael Schmidtmann](https://reader038.vdocument.in/reader038/viewer/2022110121/558c1f1bd8b42aa2528b47a0/html5/thumbnails/13.jpg)
![Page 14: Compensation Strategies Michael Schmidtmann](https://reader038.vdocument.in/reader038/viewer/2022110121/558c1f1bd8b42aa2528b47a0/html5/thumbnails/14.jpg)
1. Comp Plans Don’t Change with the Times
![Page 15: Compensation Strategies Michael Schmidtmann](https://reader038.vdocument.in/reader038/viewer/2022110121/558c1f1bd8b42aa2528b47a0/html5/thumbnails/15.jpg)
2. Total Cost of Sale is Too High - Overpay
![Page 16: Compensation Strategies Michael Schmidtmann](https://reader038.vdocument.in/reader038/viewer/2022110121/558c1f1bd8b42aa2528b47a0/html5/thumbnails/16.jpg)
3. Requires Manual Calculations
![Page 17: Compensation Strategies Michael Schmidtmann](https://reader038.vdocument.in/reader038/viewer/2022110121/558c1f1bd8b42aa2528b47a0/html5/thumbnails/17.jpg)
4. Isn’t Attractive to Potential New Hires
![Page 18: Compensation Strategies Michael Schmidtmann](https://reader038.vdocument.in/reader038/viewer/2022110121/558c1f1bd8b42aa2528b47a0/html5/thumbnails/18.jpg)
5. Incents Wrong Behaviors
![Page 19: Compensation Strategies Michael Schmidtmann](https://reader038.vdocument.in/reader038/viewer/2022110121/558c1f1bd8b42aa2528b47a0/html5/thumbnails/19.jpg)
6. Gray Areas & Loopholes
![Page 20: Compensation Strategies Michael Schmidtmann](https://reader038.vdocument.in/reader038/viewer/2022110121/558c1f1bd8b42aa2528b47a0/html5/thumbnails/20.jpg)
7. Difficult to Change
![Page 22: Compensation Strategies Michael Schmidtmann](https://reader038.vdocument.in/reader038/viewer/2022110121/558c1f1bd8b42aa2528b47a0/html5/thumbnails/22.jpg)
Compensation Metrics
& Tools
Aligning Incentives &
Strategy
Best Practices
![Page 23: Compensation Strategies Michael Schmidtmann](https://reader038.vdocument.in/reader038/viewer/2022110121/558c1f1bd8b42aa2528b47a0/html5/thumbnails/23.jpg)
![Page 24: Compensation Strategies Michael Schmidtmann](https://reader038.vdocument.in/reader038/viewer/2022110121/558c1f1bd8b42aa2528b47a0/html5/thumbnails/24.jpg)
Comp as % of G.P.
![Page 25: Compensation Strategies Michael Schmidtmann](https://reader038.vdocument.in/reader038/viewer/2022110121/558c1f1bd8b42aa2528b47a0/html5/thumbnails/25.jpg)
Total Sales Compensation
Total GP
Compensation as % of GP=
![Page 26: Compensation Strategies Michael Schmidtmann](https://reader038.vdocument.in/reader038/viewer/2022110121/558c1f1bd8b42aa2528b47a0/html5/thumbnails/26.jpg)
<20%
25%
30%+
![Page 27: Compensation Strategies Michael Schmidtmann](https://reader038.vdocument.in/reader038/viewer/2022110121/558c1f1bd8b42aa2528b47a0/html5/thumbnails/27.jpg)
Base Salaries
![Page 28: Compensation Strategies Michael Schmidtmann](https://reader038.vdocument.in/reader038/viewer/2022110121/558c1f1bd8b42aa2528b47a0/html5/thumbnails/28.jpg)
Uncle Sam Doesn’t Care if
Your Compensation
is Salary or Commission
![Page 29: Compensation Strategies Michael Schmidtmann](https://reader038.vdocument.in/reader038/viewer/2022110121/558c1f1bd8b42aa2528b47a0/html5/thumbnails/29.jpg)
Does Higher Comp Drive Higher Performance?
![Page 30: Compensation Strategies Michael Schmidtmann](https://reader038.vdocument.in/reader038/viewer/2022110121/558c1f1bd8b42aa2528b47a0/html5/thumbnails/30.jpg)
$24,400 per Year
![Page 31: Compensation Strategies Michael Schmidtmann](https://reader038.vdocument.in/reader038/viewer/2022110121/558c1f1bd8b42aa2528b47a0/html5/thumbnails/31.jpg)
$29,538,000 per Year
![Page 32: Compensation Strategies Michael Schmidtmann](https://reader038.vdocument.in/reader038/viewer/2022110121/558c1f1bd8b42aa2528b47a0/html5/thumbnails/32.jpg)
1,000 Times More Money• Who is More Motivated?• Who Works Harder?• Who has a Better Attitude?
![Page 33: Compensation Strategies Michael Schmidtmann](https://reader038.vdocument.in/reader038/viewer/2022110121/558c1f1bd8b42aa2528b47a0/html5/thumbnails/33.jpg)
![Page 34: Compensation Strategies Michael Schmidtmann](https://reader038.vdocument.in/reader038/viewer/2022110121/558c1f1bd8b42aa2528b47a0/html5/thumbnails/34.jpg)
Compensation Metrics
& Tools
Aligning Incentives &
Strategy
Best Practices
![Page 35: Compensation Strategies Michael Schmidtmann](https://reader038.vdocument.in/reader038/viewer/2022110121/558c1f1bd8b42aa2528b47a0/html5/thumbnails/35.jpg)
Not to Pay People as Little as Possible
Get Maximum Productivity and Meet Profit Objectives
Make this a Shared, Team Mission
How Can we Make This a Win-Win?
![Page 36: Compensation Strategies Michael Schmidtmann](https://reader038.vdocument.in/reader038/viewer/2022110121/558c1f1bd8b42aa2528b47a0/html5/thumbnails/36.jpg)
Give What They Value Most
Take Away Where They Value Least
![Page 37: Compensation Strategies Michael Schmidtmann](https://reader038.vdocument.in/reader038/viewer/2022110121/558c1f1bd8b42aa2528b47a0/html5/thumbnails/37.jpg)
1. Change Variable Comp Plans Every Year
2. Tweak Account Base / Territories Every Year
3. Give Thought to Alignment – Plan Objectives and Work Backwards
4. Always Provide New “Sweeteners” with Every Change
![Page 38: Compensation Strategies Michael Schmidtmann](https://reader038.vdocument.in/reader038/viewer/2022110121/558c1f1bd8b42aa2528b47a0/html5/thumbnails/38.jpg)
5. Salary Portion “At Risk”
6. Space Rewards Every 3-4 Months
7. Not All $$ Equal1. Pay for “Good $”2. Low Value = Low $
8. “Targeted Compensation”1. Earnings2. Objectives
![Page 39: Compensation Strategies Michael Schmidtmann](https://reader038.vdocument.in/reader038/viewer/2022110121/558c1f1bd8b42aa2528b47a0/html5/thumbnails/39.jpg)
ONE CHANGE YOU CAN MAKE