The Operant Approach for Designing a
High Performance VCS

Operant’s approach to building your variable compensation is rigorous, thorough and proven. The processes we follow ensure your system will be one that enhances your organization's effectiveness and is accepted and supported by your teams.

System Development

The Operant process for developing variable compensation systems includes the following steps:

  1. Assessment of the your current variable compensation plan and related base salary ranges per role.
  2. A thorough review of your business strategy and current business development issues through focus groups and individual meetings with select business development team members, managers, executive leadership and existing compensation administrators.
  3. The establishment of goals for the variable compensation plans; what change in behavior and business performance you want to achieve.
  4. Role definition or clarification for all of your business development positions, if not clearly defined or if inconsistent with your goals.
  5. The creation of your variable compensation system prototype that aligns your needs with effective compensation methods designed to produce the results you seek. A one-size-fits-all approach is never used.
  6. The simultaneous presentation of the prototype to your compensation team comprised of select team members (e.g., your VP of Sales and company controller) and the financial modeling of the prototype.
  7. Refinement of your system based on feedback from your compensation team and the modeling outcomes. This step ensures the system has management buy-in and is one that will produce desired financial results.
  8. Ancillary issues, such as multi-division or inter-departmental business development, special product lines, commission during a leave period, commission sharing, are addressed and your related policies are created.

System Documentation

The documentation of your Operant Variable Compensation System will be thorough, clear and serve as a management tool for appropriate and equitable issue resolution.

Your system documentation will include:

  1. Thorough documentation of the full plan and all ancillary components.
  2. Rationale for the system components.
  3. Definitions of all critical terms and concepts, such as what constitutes a sale, how gross margin is calculated, what costs are included in Cost-of-Goods-Sold/Cost-of-Sales, what businesses or individuals qualify as a new customers, etc.
  4. The exception process and the rationale for it.
  5. A short version of the plan for recruiting new team members.
  6. A comprehensive version for sales and executive management and human resource staff.

System Roll Out

Operant considers the professional introduction of the new variable compensation system to be critical to system acceptance and maximization. Operant develops all materials necessary for your leadership to professionally introduce the new system. Operant professionals will assist in all phases of roll out. We believe that a roll out led by a key sponsor, who is a member of your team, is most effective. However, Operant will conduct the roll out if desired.

The system roll out will include:

  1. Design of the roll out process, including timing, attendance, venue and material preparation.
  2. Development of a thorough, properly organized and professional presentation.
  3. Assistance with your sponsor’s presentation of the new variable compensation system. This may include one presentation or multiple presentations to various business development teams.

System Implementation

Operant knows that accurate and timely commission and bonus payments are critical to the acceptance of your variable compensation system as well as a necessary component of gaining the trust of sales professionals. A well-developed and managed system will eliminate the common phenomenon of sales professionals spending time analyzing each payment for accuracy.

We work closely with your accounting, sales management or human resource personnel to build the processes, using your existing internal systems. No new software is necessary.

The system implementation will include:

  1. Steps for verification of accuracy of transaction details by the compensation administrator to eliminate over or underpayment.
  2. Formulas and processes for all variable compensation calculations.
  3. Commission/bonus statements to accompany payments.
  4. Process for recovery of overpayments, should they occur.