Remember when sales professionals were the “special” ones whose compensation included an upside? The pay-for-performance trend emerged in popularity several years ago, and is showing no indication of losing steam. In fact, Mercer reports 89 percent of companies link performance and pay.

Pick up virtually any compensation index or report and you’ll quickly see total reward strategy has embraced a variety of incentives for all employees, and are tied to personal and company performance.  Since the world of compensation has become more complex, I wanted to explore how sales compensation changed, and the extent to which the millennial generation has impacted total reward strategy.

I didn’t have to go far. I lead sales for Miller Heiman Group’s consulting practice in North America, of which sales compensation is a major component. Our compensation expert, Michael Nagorski, is on my team. In addition, Bruce Tulgan, sales rain maker and millennial expert, also shared his thoughts on the subject. Here’s what they had to say:

Michael Nagorski: Pay for performance has been enabled dramatically by technology, by not only allowing companies to better align their compensation strategy to measure individual, team and organizational results, but to broaden their view from simply cash rewards to cash rewards, non-cash rewards and meaningful recognition. We often think of incentives in the myopic sense of cash only, though any company limiting their scope of rewards to only cash-based is missing a significant opportunity to affect their total reward strategy.

Sales has a history of focusing on cash, measuring success on the ability to increase your W-2. It also has a history of offering non-cash rewards when you consider the popularity of contests, competitions and awards to be the best across a set of metrics. Think about a “President’s Club” or a similar idea where the winner and spouse can earn a luxury trip full of exclusive experiences. While rooted in being the best, competitions like these tend to engage only the elite, and sales has looked at alternative strategies to engage not only top performers, but also motivating the entire organization.

Enter recognition, a strategy that is can be more meaningful than cash and, when done well, can have lasting effects on the entire sales, and even company and culture. To be clear, recognition is not about participation trophies, a common association with the millennial generation; rather it is about acknowledging those who contributed to the larger goal that warrants appreciation. A trait of the millennial generation is a desire for immediate feedback, a key aspect for a successful recognition program. To this point, the increasing acceptance and usage of a recognition program came from a need voiced by millennials though championed by all generations in a workforce.

When we look at the best total reward strategy, it is about the holistic approach to cash, non-cash and recognition that maximizes a company’s performance. With sales becoming more complex, so, too, has compensation and reward strategies. Sales compensation has quickly left behind the “If/then” reward system, and realized the need to reward at multiple touchpoints across the customer’s journey. Millennial sellers have made sales about much more than revenue and money, and while those are important, we can do more to improve the organization by tapping into innovative designs and strategies to maximize performance.

Bruce Tulgan: The reality is that, today, we live in a world in which relationships are governed by an increasingly short-term and transactional logic. That’s true for people of all ages. But Millennials have never known it any other way. They are wired to seek short-term rewards for short-term desired behavior. The best solution? Plug into Millennials’ mind-set. Stop paying them and start buying their results, one by one. The more you trade results for rewards, the more reliable their performance will be. The smaller the increments you buy in, the more effective it will be.

The critical element when it comes to rewarding Millennials is letting them know that rewards are tied to concrete actions within their own direct control. This might remind you of the old-fashioned pay scheme called piecework in which individuals are paid an agreed-on amount for each defined unit of work they produce. In sales, typically, people are paid after they make the sale.  The key to success with any work on a longer time-horizon – such as a complex sale – is to define measurable pieces of work along the way and assigning a value to those measurable pieces – ideally setting a price per piece.


When we examine the intersection of Michael and Bruce’s comments, we realize compensation strategy has kept pace with employee demand. Sales compensation, by default, must drive the behaviors required to execute a company’s go-to-market strategy. At the same time, rewards are most effective when matched to the motivations of the individual, monetary or otherwise.

About Michael Nagorski

Michael Nagorski serves as a Senior Consultant for Miller Heiman Group’s Strategy Ready practice, and leads the firm’s compensation projects. He has spent nearly a decade evaluating, analyzing and deploying sales and sales compensation strategies for clients in a range of industries, including life sciences, pharmaceutical and bio sciences. His holistic approach to leveraging compensation as a tool for performance enhancement has created sustained client success. An avid learner, Michael actively looks for the latest trends and insights from academic sources and market research to help guide decision making and informed judgment.

About Bruce Tulgan:

Bruce Tulgan is the founder of RainmakerThinking, Inc., a management consulting firm.  He is a sought-after keynote speaker, management trainer and an adviser to business leaders all over the world. He is the author of numerous books, including NOT EVERYONE GETS A TROPHY; HOW TO MANAGE THE MILLENNIALS.


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