An EcSell member and I were discussing compensation recently. Specifically, we were talking about how to use variable compensation and bonuses most effectively, and the member shared an interesting best practice with me. In their organization, they use “spot bonuses” on an ad hoc basis to reward people that helped drive sales growth. These spot bonuses are completely at the discretion of sales leadership as to when they are rewarded, to whom they are rewarded and the amount of the bonus. Most importantly, spot bonuses are awarded to people who are not part of the sales team.
What the EcSell member’s company has seen is that spot bonuses are highly effective in creating excitement and enthusiasm about sales throughout the entire company because now everybody is eligible for additional compensation based on improved sales results. The bonuses reinforce the importance of sales to the entire organization, but most importantly they help give ALL employees a line of sight to how they can impact sales. Every time a spot bonus is
awarded, the entire company learns what that person did and how their actions eventually led to increased sales. This constantly reinforces how each person can be integral to the growth efforts of the company.