If you have an eat-what-you-kill compensation model, think about these questions:
For our firm, what are the pros and cons of our compensation model given where we are going (or want to go) as an organization?
Do the positive aspects of the eat-what-you-kill model outweigh the bad, or vice versa?
Would we really be willing to make a meaningful change from the compensation plan we have to something different? What would the implications be for our people and our organization?
What are all the behaviors we want to reward with our compensation plan? Is personal production the only one? If not, what are the others, and how do we value them relative to one another?
If business development or volume of client responsibility is important to your organization-and it is for most of us-I encourage you to include this as a factor in your incentive compensation plan, but not as the sole factor. This may not be a dramatic, immediate shift. I am not recommending an about-face from 100% commission, or production-based compensation to 100% salary. You can begin by incorporating additional components of incentive and additional components of salary if you don't already have them. Here are some components to consider:
Base salary to reward for people management, client service, firm management and leadership responsibilities.
Sales incentive to reward for business development-either a percentage of the revenue generated or a flat dollar amount (or percentage of salary) for meeting or exceeding individual sales goals.
Individual incentive-either a dollar amount, a percentage of salary or a percentage of firm profit, earned based on the achievement of individual goals that are not production-related, like being an effective delegator, having an impact on the development of people, contributing in a meaningful way to firm-wide initiatives and teamwork.
Also remember not to muddy the issue with ownership elements. Owners should be paid separately for their job and for their ownership. Personal production should not define your split of the firm's bottom line, ownership should. Individual sales, team sales, client load or client management success should be rewarded through incentive compensation and not confused with ownership returns.