Equal Earning Opportunity (Unbiased Plan)
When territory differences are not accounted for in an IC plan the differences in payout may have more to do with differences in territory dynamics such as product potential, product share, managed care or accessibility than with individual performance. This is often referred to as a biased plan. Establishing fair or equitable territory goals is a complex matter.
For example, territories in areas such as the Pacific Northwest, Minnesota, and New England often have much more challenging managed care and access issues than other areas of the country. When this is not appropriately accounted for in the IC plan, there can be a negative plan-induced bias against these areas of the country resulting in a general plan mistrust and distraction from selling. There are analytical approaches that can be used to test any plan for potential biases and to create an unbiased plan.
It is not enough to only have a plan that is fair and equitable. A plan can be perfectly fair and equitable and have no bias but if is perceived by the field as biased or unfair there is still a problem. Therefore, it is critical to also protectively communicate to the field in a way they can understand and believe the fairness of the plan. There are analytical and visual approaches that can be used to ensure this understanding by the sales organization. A proactive approach to both illustrate and communicate fairness and equity will create confidence in the plan and will be much more effective than a reactive approach to a large number of field inquiries.