Thought Leadership

Aligning People Strategy with Business Goals: Rethinking Sales Compensation

5 minute read

In today’s volatile market, food and beverage companies are under pressure to do more with less. Inflation, fluctuating demand, and changing consumer behavior have created the need for leaner, smarter operations. At the same time, sales teams are being asked to grow revenue under tighter margins. For HR leaders, this creates a difficult balancing act: How do you motivate and retain high-performing sales talent while keeping compensation plans cost-effective and aligned with business goals?

The answer lies in strategy, collaboration, HR analytics, and change management. In this article, I’ll explore how HR leaders can align talent and business outcomes to optimize sales compensation and drive real impact. Keep reading for more.

Start with business strategy

Too often, sales compensation plans are built in isolation from broader business objectives. Before diving into plan design, HR leaders need to understand company strategy. This step is especially important, as research shows nearly one-third of leaders can’t name even one of their company’s strategic priorities.

Start by knowing the ins and outs of your organization’s goals. Are you focused on market expansion? Margin improvement? Customer retention? Each goal demands a different sales behavior, which should be reinforced through compensation.

Also, be sure you’re part of early conversations with the C-suite and finance. Your compensation plans should support where the business is headed, not just where it’s been, so understanding future strategy is critical.

Use analytics to build smarter plans

HR analytics tools aren’t just for tracking turnover or engagement. These systems are also powerful for shaping compensation strategy. Historical performance data like deal size, customer acquisition cost, and sales cycle length can help identify what behaviors drive success in your top salespeople.

From there, analytics tools can model different compensation scenarios to see which mix of base pay, commissions, and incentives aligns with company goals and budget. Another benefit of these systems is they enable objective decisions that are backed by data.

Plus, many organizations are already using tools that have these capabilities, like Workday, SAP SuccessFactors, UKG Pro, Visier, Oracle HCM Cloud, and more. With the help of a skilled system specialist, you can turn your current HR analytics tool into an asset for compensation strategy and decision making.

Partner closely with finance

Sales compensation can be one of the largest variable costs for an organization, yet it’s an area where many leaders lack confidence. In fact, research shows only 26% of CFOs are satisfied with their current sales compensation plans.

This creates an opportunity for HR to partner closely with finance. By collaborating on plan modeling, affordability analysis, risk management, and accurate budgeting, you can design compensation programs that are strategic and sustainable. This partnership will also help avoid plans that overpay for underperformance or create internal inequalities.

By working closely with finance teams, HR can better position themselves as trusted business advisors and drive alignment between people strategy and financial outcomes.

Standardize plans across business units

Many food and beverage companies grow through acquisitions, causing multiple sales teams to have different compensation plans. This creates unnecessary complexity and administrative overhead.

It can also lead to internal pay gaps, employee dissatisfaction, and declining company performance due to decreased morale, productivity, and difficulty in attracting and retaining talent.

To streamline operations and reduce costs, push for standardized compensation structures across business units. While some customization may be needed for different markets or roles, the core design should be consistent. It makes plan management easier and improves transparency for salespeople.

Revisit job evaluation and benchmarking

Good compensation design can’t be done unless you know what each sales role is worth, which requires updated job evaluations and external benchmarks. Many companies rely on outdated role definitions or market data that no longer reflect current realities. At the minimum, job evaluations and benchmarking should be done annually, with some experts recommending every 6 months. Regularly revisiting job leveling and benchmarking will help your pay structures stay competitive and reflect what employees are actually doing in their roles.

Additionally, if your company operates globally, you’ll need to adapt your global standards to fit local needs. Having flexible standards and procedures promotes fairness, minimizes compliance risks, and simplifies expansion into new markets without starting from scratch each time.

Eliminate commission delays

Research shows that nearly 3 in 4 businesses experience delays in receiving payments. While delayed payments are common, companies need to make sure business problems don’t have an impact on sales team members receiving their commission.

Commission delays can cause catastrophic damage to trust and morale. To prevent that, companies need to regularly review processes to identify gaps in data accuracy, timing, and approval flows, paying special attention to manual steps or siloed information.

Investing in automation to integrate sales performance data directly into payroll systems can also reduce human error and accelerate payout timelines. If issues do come up, being transparent and resolving them quickly can go a long way in limiting the impact. When sales reps can consistently count on their pay being accurate and timely, they’ll focus more on growing the business, not questioning their organization’s commitment to them.

Prepare for technology implementations

Also keep in mind how sales compensation strategy will impact future initiatives, like technology implementations. Optimizing your compensation plans before rolling out new software or automation solutions can enhance the effectiveness of your transformation efforts. Clear, standardized plans simplify configuration in compensation software, leading to faster implementation and lower costs. Plus, research shows that poor data quality can cost as much as 15-25% of a company’s total revenue, so you don’t want to risk it.

Standardizing data also streamlines reporting, giving managers deeper insights into sales performance, incentive effectiveness, and areas for improvement—ultimately driving better business decisions and greater sales productivity.

Create a change management game plan

When rolling out updates to your sales compensation strategy, keep in mind that changing how people get paid is a big deal. Even if the updates are beneficial for both the company and employees, they can still cause confusion and concern. Be prepared for pushback by having a solid change management plan in place from the start.

Change management should be treated as part of your overall compensation strategy, not something to figure out later. It’ll help employees understand the change, why it’s happening, and how it benefits them. This insight will make employees more likely to get on board.

Make sure your change management plan includes:

• Clear, consistent communication about what’s changing and when
• A space for employees to ask questions and share feedback
• Prepping managers so they know how to communicate with their team
• Offering support through town halls, FAQs, and meetings

The goal isn’t just to avoid pushback, it’s to create buy-in and reduce turnover. Plus, research shows employees are six times more likely to adopt change when there is excellent change management in place.

Improve your sales compensation strategy today

Sales compensation isn’t a one-time exercise. It’s a strategic tool that, when done right, aligns behaviors, controls costs, and drives business results. For HR leaders in the food and beverage industry, the goal is clear: simplify where you can, collaborate across functions, lean into data, and manage the people side of the change.

Following the steps outlined above can shift your compensation strategy from reactive to proactive. And in today’s uncertain environment, that’s exactly what your business needs. For more help with your company’s compensation strategy, get in touch with the Catena Solutions team.