I've coined this helpful acronym, STARVE, to help describe the following negative elements to any compensation plan.

Part III: Negative elements that you want to avoid in any compensation plan

  • 1. Stagnation - Make sure that your plan doesn't have the problem of going through a growth phase and then stagnating due to lack of ability to be attractive to new distributors due to an increasingly present cap reducing the efforts of all new distributors.
  • 2. Termination - Make sure the plan is properly formulated so that the company isn't eventually hurt by its own success. Many of the original binaries had this problem resulting in many people getting severally hurt and having their efforts go un-rewarded.
  • 3. Alien - Some compensation plans are so difficult that only the a select few have any idea why or when people are getting paid. These plans reduce the effectiveness of every distributor because they cannot properly explain to the next person how to get involved and become successful with the company.
  • 4. Resistance - Many plans are really good at paying the top leaders but place a severe amount of resistance between the new distributor and the lofty leadership status. New members make very little so that the plan can feed the extreme overhead of a few leaders.
  • 5. Vulnerability - The most important aspect of a company is its distributors. If you don't properly reward your leaders you are always at a state of vulnerability to them leaving and taking a large portion of their downline with them. Properly rewarding the leadership should be a vital part of any plan.
  • 6. Exaggerated - The last thing that you want to do is make your compensation plan ineffective in properly rewarding people for their efforts. Your compensation plan should sound strong and perform equally strong. The worst thing for any company is to develop a reputation for being stingy or having a compensation plan that sounds effective but exaggerates greatly the payments that people will receive.

If your plan does these things everyone is hurt. The company can’t grow, or even worse, it is devoured by its own growth while the distributors or some portion of them cannot make the level of income they expect.