[Dale Deg]

If the target company in part way through their fiscal year when a merger closes, should the incentive plans for their salesman be changed? It your answer is yes,what things might be important so they are not demotivated going forward?

[Yuin Harng Ng]

As someone with over 9 years experience in sales, I have noted that while sales incentive are useful for driving short-term sales targets, it has to be aligned with a purpose on why it would make sense for us to sell a certain product or solution or service to the client. If you can align marketing efforts with sales incentive with value-add to customers, then you’ll have a very successful sales campaign.

[Elizabeth Perlak]

I think there are a couple of things that should be considered before you can make the determination of if the sales incentive plan should be changed and when. You will want to consider the objectives of the merger – is the target’s product remaining in play separate from the acquirer? Are the sales teams being merged completely or are they continuing to sell their respective products in parallel for a time? As stated by earlier commenters – the incentive plan needs to align with the behavior you are driving which includes how it aligns to the strategy of the merger. Additionally, you will want to consider the contractual obligations you may have to those incentive plans – in different jurisdictions you may need significant notice or procedure to modify or change existing sales commission agreements or other compensation documents – you’ll want to collaborate with legal and HR to understand any timeline restrictions that may be in place and it may vary significantly from state to state in the US as well as from country to country in a global team. If these decision points bring you to a place of yes, it is the right time and action to change those plans – you may want to do so at a time where it can part of a larger communication or roll out of additional integration – maybe they have better products to sell now, maybe there are efficiencies of procedure that are gained from the integration – whatever it is find positives of the merger to highlight. Finally if sales are key employees- while you may be adjusting the plan for the long term, consider a one time bonus or other payment to retain them through the transition.

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