6-Month Comp Plans for Sales Reps
6-Month Comp Plans for Sales Reps
Why GitHub’s 6-month compensation plan can be a game changer for sales teams
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6-month comp plans.
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Why GitHub’s 6-Month Compensation Plan Can be a Game Changer for Sales Teams
Any revenue leader can agree that one of the biggest challenges leaders face is aligning sales teams with the ever-shifting market landscape. Things change - fast. Traditional annual compensation plans can feel like trying to hit a moving target. GitHub, however, has embraced a bold approach by implementing six-month compensation plans for their sales team - let’s get into it.
Why switch to 6-month comp plans?
For fast-paced companies with more dynamic environments where market demands can shift quickly, waiting 12 months to recalibrate just doesn’t cut it. A six-month comp cycle can allow companies to stay nimble, ensuring that their sales targets are always aligned with current realities.
Here’s what this shorter cycle delivers:
Quick adaptation to market changes: With a six-month comp plan, GitHub isn’t stuck playing catch-up. They can quickly adjust targets and incentives to reflect new market conditions, product launches, or strategic shifts. This means their sales team is always chasing goals that are relevant and within reach.
More accurate targets: Shorter comp plans mean higher fidelity targets. Reviewing and adjusting compensation every six months allows GitHub to set sales goals that are spot-on with the business landscape, benefiting both the company and its reps.
Fairness and flexibility: Let’s face it - things can change fast. Whether it’s a downturn in a specific market or a pivot in product strategy, GitHub’s six-month cycle allows them to make timely adjustments, ensuring reps aren’t penalized by forces beyond their control.
From skepticism to trust: Reps’ reactions
It’s natural for reps to be wary of a six-month comp plan, especially those used to planning big deals over a full year. But once reps at Github experience the flexibility and protection this approach offers, the skepticism fades.
Protection during business shifts: Reps quickly see the safety net this plan provides. Instead of being locked into a year-long plan that might become obsolete, they have the reassurance that their compensation can be adjusted to reflect the new business reality, safeguarding their earnings and performance.
Building trust: Over time, the ability to recalibrate goals builds a solid foundation of trust between leadership and the sales team. Reps know that GitHub has their back, which strengthens their loyalty and alignment with the company’s objectives.
Operational considerations
Of course, a six-month comp plan isn’t without its challenges. For example, it doubles the workload for operations and finance teams. But the payoff - greater agility and closer alignment with business goals - makes it worth the effort for GitHub.
Iterative testing: The shorter cycle allows the testing of different incentive structures and sales strategies, which can then be fine-tuned for the next cycle. This iterative process keeps teams performing at their best - the gong keeps ringing.
Increased feedback loops: More frequent adjustments mean more opportunities to gather feedback on what’s working and what isn’t. This continuous loop of feedback is crucial for ensuring that sales strategies stay in lockstep with market conditions.
Strategic impact
By reducing the planning cycle, GitHub is better equipped to navigate rapid market changes. This approach also underscores a culture where the success and well-being of the sales team are prioritized, right alongside the company’s financial goals.
One notable outcome of this strategy has been longer tenure among GitHub’s sales reps. The consistent recalibration of goals, combined with the company’s responsiveness to market changes, has fostered a strong sense of loyalty and trust. Reps feel valued and supported, knowing that GitHub is committed to their success and well-being. This, in turn, encourages them to build their careers within the organization, leading to a more stable and motivated team.
The TL;DR on 6-month comp plans:
Provides the flexibility and agility needed in a fast-changing market.
Ensures sales targets are accurate and relevant.
Builds trust and alignment between the sales team and leadership.
Encourages longer tenure by fostering a supportive and responsive work environment.
Creates a framework for continuous improvement through regular feedback and iteration.
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Would love to hear your feedback on 6 vs. 12-month sales compensation plans. Have you tried a shorter comp plan? Have been temped to?
September has truly crept up. Hope to see some of you IRL at upcoming events!
Barker ✌️