What is a VP business development compensation plan? What are typical scenarios and how it works? These are the questions we will answer in this section.
Learn About VP Business Development Compensation Plan
To begin, we must first define what a VP business development compensation plan is. A VP business development comp plan is an alternative to the traditional comp plan.
It is also referred to as a comp plan for high-value comp, a comp plan for high potentials, and the like. Simply put, a VP business development comp plan is designed.
It is to meet the needs of high-performing employees who very much deserve to be compensated well. This type of compensation plan rewards these top-performing employees.
In a way that they can continue to work hard to help the company grow and attain its goals. The basic idea behind a VP business development compensation plan.
It is to provide a different structure for paying employees based on their value and performance. This structure is also being used by businesses.
They have fewer resources which cannot afford to pay all their employees well.
Typical Scenario Of A VP Business Development Compensation Plan
Let us take a look at an example of how a VP business development compensation works: First, you have to consider the fact that each employee has his or her own goals and objectives.
In other words, each employee has their motivation for working for any company. Based on that motivation, each one has his or her level of performance.
This is in helping the company achieve its goals and objectives. For example, one employee may want to make a lot of money.
While another may want recognition from the company and its management team. It is for his or her value in helping the company succeed.
So, what this means is that every employee can’t get an equal amount of money. This is from the company because each employee will never fulfill his or her personal goals.
And objectives by performing at the same level as another employee. In other words, if everyone gets paid equally then some employees will not get their fair share of money from the company.
It is because they did not bring in as much value as others did. This also means that everyone can’t become VP of business development with equal pay.
This is because it can be argued whether or not everyone deserves this position based on their performance. These are just some examples of why both traditional compensation plans are not ideal in most companies.
Why? It is because there is no clear-cut standard when it comes to deciding. Which employees deserve more pay than others do.
How Does A VP Business Development Compensation Plan Work?
So, now that we have established that there are flaws in traditional compensation plans. We will now proceed to discuss how a VP business development comp plan works.
The first thing that you must know is the structure of this type of compensation plan. It differs from the traditional plan in one way.
That is, instead of using seniority as the primary factor for determining pay. It employs value and performance instead.