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Three Ways Businesses Can Motivate Employees and Maintain Sales Growth Post-Merger

While mergers and acquisitions (M&A) can bring excitement and untapped growth potential to aspiring companies, they also come with unique challenges. Often, these organizations face obstacles in assimilating the staff, procedures and culture of the merged or acquired company with their own — all without disrupting sales and customers engagement.

Even as M&A transactions become more frequent, more companies are requesting help to realize the full benefits of the move. A recent HBR study found that between 70 and 90% of mergers fail to achieve the anticipated synergy and/or business objectives that inspired the transaction. 

To successfully navigate M&A, businesses can benefit from a thorough strategy that empowers and unifies the potentially new-look sales function along a credible and accepted sales compensation plan. Through defined role alignment, clear pay level guidelines and streamlined communications, businesses can overcome the most prominent post-transaction hurdles and position their sales teams for continued long-term success.

Establish Clear Sales Roles
The fusion of two companies typically places two different sales teams — each with its own products, titles, territory maps, go-to-market strategies and work styles — under one roof. Although it will take some time to get everyone on the same cultural page, businesses need to align sales leaders and junior staff alike across a foundational practice set to maintain operations and customer satisfaction.

Successful sales team alignment begins with team-wide role mapping, which grants sales directors a common understanding of an organization’s many different titles, pay levels and sales structures. A detailed role matrix not only builds a clear and consistent sales operations language, but ultimately can help teams make informed decisions around customer allocation, structure and service processes. In building their role matrix, businesses should consider both historical data along with direct feedback from interviews with key personnel to get the broadest feel for role expectations and responsibilities. In doing so, team leaders can define role titles, descriptions, objectives, pay levels and any preferences for tenure, education and/or special skills.

Role matrixing also provides sales leaders with an avenue to map customer segment responsibilities against varying revenue types. An often-overlooked mapping component, revenue type clarification, can help define pay levels against three categories:

  • Retained revenue (the same revenue that existed in the prior fiscal year)
  • Penetration revenue (the increase in year-over-year sales revenue)
  • New revenue from new customers.

Further, revenue categorization can highlight similarities and nuances in roles across both original and incoming organizations.

Sales team alignment not only helps every worker understand his or her responsibilities, title and compensation in the post M&A organization, but it also offers leaders greater visibility into opportunities to challenge the status quo and make sound business decisions moving forward. With a baseline sales role inventory complete, these key stakeholders can begin addressing additional challenges.

Stabilize Pay Levels
In aligning roles, new-look businesses also face the challenge of aligning pay levels. It’s possible — and maybe even likely — that incoming employees at all levels have worked toward salaries and incentives far different from those at the established company, creating disparities that can threaten morale and productivity if not addressed. Additionally, it’s possible that pay levels have detoured from industry averages and run the risk of hindering — rather than empowering — logical and progressive employee growth.

In some cases, these disparities settle themselves. For example, I remember previously working through a global acquisition of a private company which presented significant pay scale differences. Upon closer examination, my team and I discovered that the acquired company’s management team received big raises around the time it began preparing itself for sale — a boost that elevated much of the sales organization-wide pay beyond the competitive market. In this situation, the acquiring company decided against bringing the new-look staff up to those pay levels and chose instead to recalibrate salary to levels closer to competitive market trends. Ultimately, the company’s bold strategy improved employee retention and led to the creation of a new incentive plan that paid at a higher stepped rate upon the achievement of pre-defined performance levels.

However, more often in M&A scenarios, one company features one role that is paid less than a comparable position at their counterpart. To best address these gaps, companies can consider and find the right balance across disparate pay models and performance goals. When unifying salary structures, businesses can benefit from evaluating base pay separately from incentive pay and instead considering the total target incentive (TTC), or the sum of base pay plus incentive pay an employee should expect to receive upon meeting performance goals.

Performance goal definitions in and of themselves also may require some massaging following a transaction. If one team is earning more pay for a similar level of work, or performing at a higher level than another, businesses must align expectations and rewards accordingly. This requires companies to revert to a fundamental “apples to apples” comparison model and make decisions against the products and services sold, sales cycles, revenue types and priority customer segments.

If prominent pay disparities exist while there’s demand salary increases to address, it’s best to increase pay based on incentive opportunity rather than elevating it for all workers in a particular role. Doing so will motivate employee performance and offset a heavy change in expenses. Such a model also allows businesses to make decisions against employee turnover and gauge how any stagnation or elevation in salary impacts the overall workforce.

Communicate with Clarity and Power
Any M&A activity comes with plenty of questions from employees at all levels and dictates continuous communication to calm employee fears and maintain a steady workflow. Even if both the acquiring and acquired companies cannot share all transaction details, they need to keep their teams in the loop to avoid the spread of rumors and misinformation or — in the most extreme cases — attrition should employees grow more concerned.

M&A communications should happen early and frequently to inform affected employees about why the change is taking place and, importantly, the mission of the transaction. The delivery of partial messages may feel awkward and unnatural but can make a huge difference in strengthening employee trust. Even if the finish line is not yet defined, employees appreciate the transparency that comes with understanding the intended route and what it will take to complete the path.

With a better definition of the plan-for-the future in place, businesses can next transition to communicating how the activity will shift sales operations. When done correctly, their sales compensation platform should clearly outline the organization’s roles, responsibilities and mission across one common plan. Every team member needs to grasp and feel comfortable with what they can make on each deal, how they can meet performance guidelines and the frequency and style of performance evaluations. Most importantly, businesses must demonstrate that their quotas and rewards are both comparable to industry standards and attainable through hard work.

Compensation plans that link pay and performance and align team roles with financial goals can serve as effective communication tools. With this foundation in place, all team members can quickly and clearly receive pertinent information about their company’s direction and how they can pursue and promote individual and organizational growth.

Mergers, acquisitions and comparable large-scale business transactions shock traditional systems and raise questions and concerns among all involved companies and employees. While it may take some time to navigate all of the transaction details and assimilate all people and processes against newly established guidelines, consistent and frequent communication and meticulous planning can help leaders bridge the hurdles of the first months. Without communication from key leadership around organizational goals, compensation and incentives, sales teams cannot effectively propel growth and profit.

About the Author

Michelle Seger is a global sales strategy and change management leader at SalesGlobe.

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