How does the change in economic direction impact your sales force and incentive programs? Finding the balance for your company and sales people is like evaluating the age-old "glass half full/empty" question.

The economy has been like a roller coaster ride for the past year and, as expected, the down slope is truly scary for most organizations. So what does the upswing have in store for us so we can find a balanced incentive program?

For many companies this will include fewer resources, increased work loads, and high expectations due to layoffs that have occurred. On a positive note, sales people, however will have a greater opportunity to perform with increased territories and account prospects. It is imperative that companies align their incentive program properly to capitalize on these changes.

Companies need to position the compensation program to be a win-win for both the organization and the sales associate. From a company perspective, effectively designing and monitoring your program is critical to the success of your sales results. With fewer resources, companies have had the opportunity to keep their top performers and eliminate the bottom feeders. The organization needs to design an appropriate incentive plan that drives the desired behaviors from these top tier sales people and rewards them properly for their performance.

Reviewing corporate strategy in these times will provide the first step to capitalizing on change. Is there a shift in focus for your business or customers? If so, aligning the new strategy to the incentive plan will enable the sales people to deliver what the company and customers are looking for and gain the desired results.

Secondly, the organization needs to protect itself from win-falls and set realistic targets and expectations. With realistic targets set the company will achieve buy-in of the incentive program from it's sales people. This is where some companies set targets so high that they are unachievable and exhaust or discourage their sales team. When the roller coaster is on the upswing you will see a gradual climb in the performance of your business, so trending for growth in target setting is important. Reviewing and analyzing data will allow for qualified estimations of targets that are now realistic and achievable.

Applying thresholds is also a key element to providing a rewarding incentive plan that limits risk to the company. Thresholds set the bar for the sale people before they can earn an incentive. With this approach, sales people will strive to hit an established performance number and know that a payout will not be provided until such levels are met. Typically the higher the base salary, the higher the incentive threshold would apply.

In some cases you can cap incentives with upside potential that creates good opportunity for the sales person while protecting the company from overpayments. Additionally, wording in the communication must be positive and emphasize the potential from a sales person's perspective. The plan may have caps and or thresholds, but leveraging the positive elements should be the key take away message for the sales person. An example would be that targets are flat from last year and this positive message should be what sticks in the mind of the sales person not the applied caps or thresholds.

Designing effective incentive plans is as important as hiring the right sales people for your business. Plans need to be simple, rewarding and drive the desired results!