When an organization makes the decision to change the way they compensate their sales force, incentivize their management team or change other variable compensation plans, they are usually surprised by the headache it becomes.  

Most people become used to something and don't like when it changes. The same can be said about compensation plans.  People get used to a way of doing things, so they may resist a change to the way their compensation is calculated.  Especially if they perceive that they will get paid less or they will have less control over it.

So you should expect push back from the participants to their management team, and from their management team to you.  Unless you are dealing with a legal or compliance issue, you will find yourself compromising on the change to the plans.  It may be best to take a phased approach to changing the plan.  

A key to successful plan changes are transparency of data and calculated results to your participants.  Another key is clearly defining processes for dispute and exception handling.  If exceptions are not defined and agreed to, then any changes to compensation plans will be that much more likely to be challenged.  

If your plan participants do a lot of shadow accounting and challenging of the current plans and system, then expect when you attempt to change plans that there will be greater push back.

Some important tips that can aid you in implementing changes to compensation plans:

1.      Clearly define why the change is being made.

2.      Ensure that the purpose of the plan is clearly articulated and understood.

3.      Communicate how it benefits the company e.g., protect the company viability and assets (people).

4.      Communicate how it benefits the participant e.g., if the company is healthier then the participant has greater job security and potential for continued income.

5.      Ensure that there is a clearly defined process to address personnel concerns regarding the change to their pay.

6.      Communicate a timeline on the transition to the new plan.  Do not announce it on one day to implement on the next day.

7.      Get commitment from the management teams to work with their people to resolve concerns without making concessions that compromise the purpose of the plan or the goal of the plan.  

Many companies are reviewing their compensation plans in light of this volatile economy.  There is a need to review how to react to the changing markets and public reactions.  Preparation of the participants of the changing plans and clear communication of the purpose of the plan and any changes will aid the organization is gaining acceptance of the plan changes.  Stressing the security of the participants in light of the security of the company's viability will aid in lowering resistance to change.

I cannot promise that you will not hit a few bumps in the road through this process or that it will not be a stressful process. I can say that if your participants understand the need and the driving force behind the change they will be less resistant especially if they feel secure in their future and the organization's future.