Most compensation plans look brilliant on paper in December. By March, they're on life support and weighed down by questions, confusion and oftentimes, distrust. In this conversation, Dillon Anderson from Wolters Kluwer tells us what separates comp plans that barely survive from those that thrive.
Start-of-year escalations:
In Q1, your detailed, well-structured comp plan goes live. But by the end of Q1, many of these plans come crashing down. What could be the reasons?
Dillon: It All Comes Down to Organizational Maturity, and I'm not talking about company size here. I'm talking about how stable your internal processes are, how clean your data is, and whether your cross-functional teams can actually adapt when they need to.
For more mature organizations, the first thing that usually breaks is plan adoption. But for less mature ones - especially where teams operate in silos - the problem isn't even the plan itself. It's the quality of the source data.
Organizational maturity isn't just an abstract concept — WorldatWork's research on high-impact rewards programs found that mature organizations are significantly more likely to adapt comp strategy when conditions shift
Comp plans can break down in a hundred different ways post-rollout — but the escalations that follow usually trace back to the same few root causes. What's the one thing that prevents most of them?
Dillon: It's really two things working hand-in-hand. Sure, plan communications are important, but what really matters is making it clear that plans depend on quality order details. Most real disputes? They come from order data quality problems.
Here's what a lot of strategists miss: sometimes a strategy - a plan design - just shouldn't be implemented because your tools literally can't support it. You know that old mindset of "strategy drives the business and tech should just keep up"? That usually comes from strategists, not the people actually running things day-to-day.
Personally, I build an operational assessment into every plan design. This helps guide us toward what's actually doable from an operations standpoint. It prevents disasters before they happen.
Mid-year changes:
We’re now in Q2, and leadership wants to change incentives because priorities shifted. How do you handle mid-year changes to a sales compensation plan?
Dillon: I ask myself, “What's the underlying purpose of the change?”
I need to understand whether this requires changing the entire plan design, smaller aspects of it, or if a SPIF can drive the needed behavior. Changing comp plans shouldn't be a knee-jerk reaction, so understanding the significance is key to partnering effectively with stakeholders.
Not every mid-year comp change is created equal. What's the right framework for deciding whether to adopt a change plan mid-year?
Dillon: Dillon: Timeline is everything. If it's March and the plan launched in January, making immediate changes sets a terrible tone with sellers who were on track to earn. But if a half-year change is the goal, I evaluate the decision through multiple lenses before committing to anything:
Sales — Is attainment healthy under the current plan? If it is, the bar for change should be high. If it's broken, the case becomes stronger.
Sales Ops & Governance — Can the change be administered cleanly, or will it create crediting and reporting chaos?
Finance — What does it cost? Any change needs to be modeled for payout impact, budget fit, and retroactive liability.
Legal — Are there contractual obligations to sellers under the current plan that a mid-year change could expose?
IT/Tech — Can your systems actually configure and execute the new design? A plan your platform can't support is a non-starter.
M&A — Is activity driving the change? Acquisitions often force comp realignment across territories, roles, and inherited plans.
Product — Has the roadmap shifted in a way that makes the existing plan misaligned — new launches, sunsets, or pricing changes?
HR — What's the retention risk? HR ensures the change is equitable and manages the people side of any formal amendment.
Understanding why leadership wants to move quickly helps me steer toward what will actually drive the desired behavior. In many cases, an interim SPIF is the right first move — it shifts seller mindset without the permanence of a plan change. If something is significant enough to act on immediately, the SPIF buys you time to do the formal change right.
SPIFs: Strategic Tool or Expensive Noise?
SPIFs can be powerful. They can also be expensive noise. Where do you draw the line between the two?
Dillon: You can argue this from many angles, but here's what's transferable to every organization: SPIFs make sense when you need to drive very specific behavior, especially in a relatively short timeframe- and critically, when it doesn't overlap with another SPIF.
They become too expensive the moment you recognize they're not driving behavior. Hopefully that behavior aligns to some financial or strategic goal, even if it's something operationally focused like strengthening forecasting muscle from sales.
Any SPIF that becomes recurring- not just temporarily extended- is very likely already too expensive because it's no longer driving behavior.
A SPIF without this checklist is just spend.What should a SPIF include to actually change sales behavior?
Dillon: This is tough because the checklist should be tailored to your organization. Based on my experience in heavy M&A-focused organizations, here's my primary list:
- Target group & geography
- Budget
- Expected duration of SPIF
- Source data & frequency
- Cross-functional support (specifically Legal & HR, not just Sales Ops & Finance)
- Project plan to configure and communicate
Getting the checklist right is step one. Knowing whether your SPIF delivered ROI is step two — here's how to think about that.
And arguably the most important: analytics. Provide visibility throughout the SPIF. Frequent analytics are necessary to show ROI, highlight adoption, call out growth activity or behavior change, and identify your SPIF cost per dollar of incremental revenue
Trusting your gut- or letting your sales leadership trust theirs- is not the way to go when you're talking about a significant short-term financial investment.
The Q1 Move That Sets You Up for the Year
The comp teams that never scramble mid-year make one move in Q1 that most others skip. So what’s that for you?
Dillon: Communications, data automation, and other items are typically the go-to responses. For me, it's building an analytics dashboard with scalability and with visibility on key metrics like attainment rates, payout ratios, cost of sale, quota attainment spread, pay-for-performance alignment. Once set, establish a cadence for the dashboard and associated insights to be shared.
Key Takeaways
- Data quality is everything. Compensation is the face of data issues. Address root causes upstream, not just symptoms.
- Include operational assessments in plan design. Not every strategic plan is operationally feasible. Assess before you commit.
- Mid-year changes require multi-lens analysis. Before changing plans, understand drivers across Sales, Finance, Legal, IT, M&A, Product, and HR.
- SPIFs are surgical tools, not band-aids. Use them for specific behaviors in short timeframes. If they become recurring, they're already too expensive.
- Analytics set the precedent. Build your dashboard in Q1, establish cadence early, and expand your stakeholder partnerships through data visibility.
Have questions or want to discuss compensation strategy further? Connect with Dillon Anderson on LinkedIn, or join us on Uncappd- where comp practitioners get real answers from people who've actually built these systems.
