Sales manager to HR manager: “Hey we need to give an off-cycle compensation adjustment to Jane, she’s doing really well and is paid below some of her peers who are doing the same job.”

HR manager: “We have a regular cycle for compensation adjustments every June, let’s just wait for that.  Also, Jane wouldn’t know what the other reps are making anyway.”

You’ve all heard this one before, and here’s where it goes wrong:

First, Jane DOES know what the other reps are making.

Sales leaders, whether you like it or not, you should always assume that your sales team members have a very good idea of what the other members of their team are earning.  Especially those that are in similar roles or have the same titles.  Both on the base compensation side as well as variable or commissions.

How?  Why?  Where do they get that information?  

The water cooler.  Well it used to be the water cooler, but that will be replaced with some virtual version of the water cooler, also known as RepVue.

Second, and this happens often, the idea of just waiting for the next ‘merit cycle’ or whatever the company is calling it, is a recipe for sales attrition.  Telling a high performing sales person that knows they are on a lower package than some of their peers who are performing worse than they are plants the seed that they are not valued.

Waiting many more months to do anything allows that seed of discontent to grow into something much worse, resulting in attrition.

Not only that, but the rest of the team is aware of it ALL OF THIS.

So sales professionals, what should you do to avoid getting yourself in this situation?  There are a couple things:

One, when you take the job, make sure that you are comfortable with what your compensation package is in the job offer.  There WILL be others in your role who may be making more, hopefully it’s reasonably justified.  Just be sure that coming into the role, you feel that it’s fair, and you’re not starting out on day 1 with a chip on your shoulder.  (check our site here at RepVue if you don’t have an idea of what fair is).

And if you missed our recent blog post on negotiating your offer, go check it out.  Spoiler alert, we recommend negotiating your offer.

Two, when you come with an ask, do it from a position of strength.  Don’t go in hard with the ask if you’ve been struggling to break 80% the past few quarters.  The sales leadership team is going to go to bat internally for sales professionals who are successful and are paid below where they should be, especially relative to lower performing peers.

The good sales leaders know that if they don’t, it’s an attrition risk.  For those that are lower down on the leaderboard, they’re more likely to live with that attrition risk, for better or worse.

So a good way to think about this topic is that transparency in sales compensation is not necessarily something new, but it’s something that’s typically been contained within pockets INSIDE the organization.  As RepVue users know, we’re pulling the covers back and exposing it for all to see.