Get Your Compensation Stress Test
A compensation stress test is the perfect place to start when you are considering a change to your sales force compensation plans.
Click to view a larger version of this chaos chart
What is a Compensation Stress Test?
A stress test is a way to measure and visualize your company's compensation strategy.
If your company has been debating whether or not you need to make changes in your compensation plans, a stress test gives you a way to understand what is happening right now — and see if the current situation is what you intended or not.
A stress test also provides a framework for you to communicate what is happening with all the people who care about compensation. If change is needed, you can show everyone how serious the situation is and get buy-in for addressing the issue.
Your compensation stress test includes three parts:
Chaos Chart
- The green line shows the intended payout at each level.
- The red dots show what each sales force member was actually paid last year.
Giveaway Estimate
Management Team Discussion
You get a graph we call a chaos chart that compares what you intended to pay your sales force with what you actually paid.
If the dots are close to the line, your company is in good shape. If not, your compensation systems are not working the way you intended them to.
You also get an estimate of how much money your company is losing as a result of not paying people according to your official compensation plans — in other words, how much special deals and exceptions are affecting your bottom line. We call this a "giveaway estimate."
When we deliver your chaos chart, we facilitate a discussion with your management team about what the chaos chart shows, how it is impacting your business, why things are this way and what might be done to address the issues.
Less emotion, more mathematics
Compensation is an area where people have strong feelings and emotions.
Having a graphic visual that shows exactly what is going on gives you a powerful way to remove some of the emotion from the discussions about changing compensation plans.
You can discuss your company's current situation, what might be causing this, how it impacts your business, and the ways you might adjust your approach in a more neutral way.
Only from CompensationMaster
A compensation stress test is only available from CompensationMaster.
Read more: Compensation Stress Tests – Frequently Asked Questions
