The Power Of Pervasive Performance Management: Aligning All Employees to Corporate Objectives

Callidus Pervasive Performance Lorna Bennie Vishrut Parikh October 14, 2008

Agenda

Business Trends – Cash and Non-Cash Rewards

Business Challenges Addressed

TrueTarget™ Product Highlights

IncentOne – Partner Update

Q & A

How Well is Your Organization Positioned to Execute against Business Strategy? 25% Link Bonuses to Strategy 40% Link Budgets to Strategy 20% of Business Strategies Are Effectively Executed 5% of Employees Understand the Strategy “ Achieving Alignment Through Strategy Execution”, Neil Chandler, 24 October 2007, citing Kaplan & Norton 20% of business strategies are executed effectively In 70% of these cases, the reason wasn't the strategy itself, but rather bad execution

What’s Your Strategy for a Single Pay for Performance Solution? “ By 2012, 50% of customers will consolidate their talent management application portfolio down to one or two vendors.” “ Unlocking the Strategic Value From Talent Management Application Investments,” James Holincheck, 26 Dec 2007

Pay-For-Performance must be Embraced Across the Enterprise “ Variable pay should reward the achievement of specific individual goals linked to corporate goals across the enterprise and not be reserved for sales and management roles . Performance and compensation integration (pay-for-performance) enables employers to direct and achieve corporate goals, promote positive turnover, and retain top talent by compensating preferred behaviors and results based on objective performance metrics.” The Forrester Wave™: “Integrated Performance And Compensation Solutions,” Q3 2007 Zach Thomas, August 17, 2007

Best in Class Organizations that Deliver Total Compensation Achieve …

90% increased their revenue per employee

83% decreased labor costs as a percent of sales

73% improved employee job satisfaction

64% increased employee retention

“ Total Compensation Management – Taming Costs and Rewarding Employees,” David Weldon, May 2008

Organizations Recognize the Need for Pay for Performance. However…..

Growing siloed pay for performance systems

Multiple employee performance management and incentive management systems

Legacy and growing SaaS deployments

Rapid departmental deployment

Strain on Finance, HR, Sales Ops, and IT

Difficult to deploy single strategy

Incomplete view of overall employee performance

How to achieve complete alignment - across sales and the broader business?

Pervasive Performance Aligns All Stakeholders with Corporate Objectives

Sales effectiveness

Quotas and territories

Commissions and

sales plans

Commission reports

High volume

Sales Performance Management (SPM) Sales and Channel

Goal Setting

Performance metrics

Objective Management

Team performance

Non-cash Rewards

Workflow and approval

Employee Performance Management (EPM) Call Center, Marketing, Support Pervasive Performance Management Alignment with corporate objectives

Announcing Callidus TrueTarget™ Non-sales Callidus Sales Performance Management Suite Sales and Channel Callidus Pervasive Performance Suite Single common compensation foundation - TrueComp ® Callidus TrueTarget Extends Callidus Suite to Deliver Corporate Alignment with One Single System New New

Target Setting Business Challenges

Multiple performance management systems

Reliance on spreadsheets and manual processes – error prone and time consuming

Typically multi-month process

Inflexible to change as business goals change

Lack of clear employee view of how employee performance links to bonus

Highly manual and error-prone and often lead to overpayments.

TrueTarget ™: Competitive Differentiators

Built on a proven TrueComp ® Management foundation

Supports dependencies between Sales goals and corporate goals across enterprise

Extends complex rule building capabilities to bonus payout and budgeting

Support for complex bonus eligibility rules

Integration with TrueComp

Leverage TrueComp Reporting Hierarchy

Import/Export Quota Targets with approvals

Inline analytics for managers and administrators

Integrate Pay for Performance Across Departments for Alignment Sales Marketing Call Center

TrueTarget™ Key Benefits

Proactive performance management drives higher productivity

Allows managers to focus on coaching rather than just on the tactical aspects of the process .

Goal alignment ensures that people working on the right tasks

Employees focused on and accomplishing appropriate tasks aligned to corporate objectives.

Integrates performance and compensation components

Shared goals, managed across sales and broader business

Consistency and enforces compliance

Enforces policy compliance, audits transactions

Rewards employees consistently based on their contributions to the success of the business.

TrueTarget™: Product Highlights

Self-service user interface

Managers can publish and distribute weighted objectives and project bonus payouts

Participants gain full visibility into objective setting process

Assign weightings to key objectives

Discretionary scoring of objectives

Set objectives on Quota attainment

Effective dating and pro-rating based on employment history

Automatic bonus payout projections

Integrated workflow and acceptance tracking

Inline analytics for managers and administrators

TrueTarget™: Product Highlights

Communicate Quotas efficiently

Integrated workflow

Obtain and track acceptance in timely manner

Manage Quota changes effectively

Integrated with TrueComp ®

Import Quota Targets from TrueComp

Allocate Quota in TrueTarget

Assign targets to team members

Leverage TrueComp Reporting Hierarchy

Managers can override the Quota targets

Overassign or underassign the targets

Apply seasonality skews

Export Quota Targets to TrueComp

Streamline Quota Setting Process

Manager – Log in to Self-Service to Manage Team Objectives Click to set and publish team objectives Evaluate performance

Manager – Enters Team View Evaluate team performance and high level view of pay for performance / leverage

Manager – Access Participant Detail to See Assigned Objectives Individual metrics for each participant, assign weighting

Manager – Create New Objectives and Assign Goals

Manager – Reviews Quota Targets for Team

Manager – Modifies Quota Target

Plan Administrator - Set up and Group Objectives, Distribute to Team Key Takeaways

Use TrueComp ® to set up an objective

Set up objective types, or groups

Groups enable clustering of objectives of the same type

Plan Administrator - Set up Formulas Key Takeaways

Use TrueComp ® formulas

Define Various formulas based on – Base Salary, Start Date etc.

Once the objectives are set up, you can add them to a template to distribute to a group of participants.

Enables objectives to be grouped into a single campaign – such as customer satisfaction, or acquisition

Assign participants based on Eligibility

Administrator can specify multiple objectives to be distributed

Or can hand off objective setting to the manager for a distributed approach

Objectives add up to 100%

With Callidus Pervasive Performance Suite We Deliver:

Drive Pay for Performance

Every employee

Every incentive driver

Transparent processes

Single platform, single point of alignment

100% multi-tenant SaaS architecture

New Partner - IncentOne

Founded in 1997 — 125 full-time employees

Clients cross all industries and sizes including several of the Fortune 100

Incentive/Rewards administration

Offers solutions across a variety of industries — healthcare, pharmaceuticals, medical services, financial services, insurance and manufacturing

Provides incentive solutions to 5 National Health Plans, 20 Blue Cross Blue Shield Plans, 15 Health Services Partners, and numerous marquee Employers

Industry Awards

Best Incentive Program in the Financial Services Industry (Washington Mutual)

Named as one of Top 20 Incentive and Reward Companies (HRO Magazine)

Named as one of Top 10 Providers (Workforce Magazine)

Selected preferred incentive vendor by America’s Health Insurance Plans (AHIP)

IncentOne Sample Clients

Provides Total Rewards Solution Callidus Solution

What is IncentOne’s Core Business?

IncentOne works with employers to create the optimal non-cash points based rewards program across their organizations

sales department, to HR, to marketing

Full Service Providers :

Guidance in program design; budget and ROI assistance

Creative services – communications planning and marketing creative development

Award fulfillment – manage partner relationships, inventory, shipping

Tracking reports – accounting of awards issued, value, timing

Customer support -- access to live reps for all service and support issues

IncentOne: Large Portfolio of Reward Options

Rewards that appeal to all employees

Gift cards from over 400 retailers

Providing employees with rewards of their choice has the greatest impact

IncentOne Offers Marketing Services & Creative Support We partner with clients to ensure that their program is communicated effectively.

Example of IncentOne Employee Power Customized Non-Cash Points Solution to Reward for Multiple Employer Programs TM Easy tracking of points earned and redeemed View multiple programs at once

Customer Success Challenge Like others in the beverage industry, fierce competition was forcing lower margins and decreasing sales revenue. Mountain Dew wanted a program to jump start sales performance among their bottlers.

Solution

Mountain Dew implemented an innovative incentive promotion where bottlers were allocated scratch off tickets to be awarded to salespeople that achieved a volume growth target of +5% vs. the same period a year ago (in raw cases).

Participants registered in the online incentive center and were able to enter their code from the scratch off card to uncover the value of their award and shop online for a prize that they would like (ranging from $10-$100)

Results

Promotion was deemed a success!

Mountain Dew achieved a 12% lift in sales for the period of the promotion.

IncentOne helped Mountain Dew to increase sales through innovative incentive promotion.

Customer Success Challenge How to sustain momentum of success in their health and wellness program and find a ‘one-stop shop’ incentive provider that could fit into their existing programs and implement all programs together in one platform.

Solution

Took design requirements and custom-built an incentive solution for its flagship program, Motorola’s LIVESMART Challenge

Provided the technological expertise to integrate with and exchange data with Motorola systems and multiple health vendors

Results

96% of eligible employees completed their health risk questionnaire.

Approx. 25% of the workforce took part in the health and wellness programs in the first year – increased to 50% in 1stQtr 2008.

Incentives program has created a ‘buzz’ at Motorola, helping to reinforce the culture of wellness.

Motorola has seen an overall decrease in employee health risk since launching program.

IncentOne provided a ‘one-stop shop’ incentive solution to integrate Motorola’s health and wellness programs.

World’s third-largest manufacturer of wireless telephone handsets

Revenues : $36.6B

Employees : 66K

Motorola develops a portfolio of technologies, solutions and services — including wireless handsets, wireless accessories, digital entertainment devices, wireless access systems, voice and data communications systems, and enterprise mobility solutions — that make mobile experiences possible.

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