Bill Canady explains why salespeople quit when companies change compensation plans. Employees optimize for the incentives they're given, so when the economics shift, high performers often leave. He says this is acceptable if the new plan aligns with company priorities, but leaders must implement changes at quarter boundaries with full advance notice and be transparent about pay cuts.
I want to talk about that honestly, because this is where CEOs lose their nerve, and it deserves better than a slogan. We designed the compensation plan. They optimized against it exactly as designed. We got what we were paying for. When we changed what we paid for, the economics of their job changed, and 3 of them left. It changed enough because they left. Now that is the trade, and it's a good trade. You lose 3 sellers and you get a sales force pointed at Quad 1. But run it like an adult. Do it at quarter boundary, not mid-quarter, right? Make sure that people know this is coming. Tell them a full quarter ahead. Don't pretend it isn't a pay cut for some of them. They can keep doing arithmetic. They're smart people. And the moment you insult their intelligence, you lose the ones you wanted to keep.
