Your SlideShare is downloading. ×
0
7 Deadly Sins of Incentive Compensation
7 Deadly Sins of Incentive Compensation
7 Deadly Sins of Incentive Compensation
7 Deadly Sins of Incentive Compensation
7 Deadly Sins of Incentive Compensation
7 Deadly Sins of Incentive Compensation
7 Deadly Sins of Incentive Compensation
7 Deadly Sins of Incentive Compensation
7 Deadly Sins of Incentive Compensation
7 Deadly Sins of Incentive Compensation
7 Deadly Sins of Incentive Compensation
7 Deadly Sins of Incentive Compensation
7 Deadly Sins of Incentive Compensation
7 Deadly Sins of Incentive Compensation
7 Deadly Sins of Incentive Compensation
7 Deadly Sins of Incentive Compensation
7 Deadly Sins of Incentive Compensation
7 Deadly Sins of Incentive Compensation
7 Deadly Sins of Incentive Compensation
7 Deadly Sins of Incentive Compensation
7 Deadly Sins of Incentive Compensation
7 Deadly Sins of Incentive Compensation
7 Deadly Sins of Incentive Compensation
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×
Saving this for later? Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime – even offline.
Text the download link to your phone
Standard text messaging rates apply

7 Deadly Sins of Incentive Compensation

28,929

Published on

More than 8 years of accumulated big data delivers intelligence and best practices to organizations in all sizes, industries. These are the seven practices that our data shows work against you in your …

More than 8 years of accumulated big data delivers intelligence and best practices to organizations in all sizes, industries. These are the seven practices that our data shows work against you in your quest to incent right.

0 Comments
2 Likes
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total Views
28,929
On Slideshare
0
From Embeds
0
Number of Embeds
6
Actions
Shares
0
Downloads
50
Comments
0
Likes
2
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide
  • If your incentive compensation plan has six or seven components, your sales team won’t know where to focus. Worse, you could be using your plan as a quasi-manager to compensate for weak leadership.
  • Transcript

    • 1. POOR ALIGNMENT WITH BUSINESS OBJECTIVES
    • 2. Incentive compensation plans tend to be aligned with business objectives at the strategic level, but the devil is in the details. Misalignment creeps in when individual plan components conflict with broader goals.
    • 3. Look at the components of your incentive compensation plan individually. Map them back to your business objectives to make sure they don’t inadvertently conflict. ATONEMENT
    • 4. EXCESSIVE PLAN COMPONENTS
    • 5. If your incentive compensation plan has six or seven components, your sales team won’t know where to focus. Worse, you could be using your plan as a quasi-manager to compensate for weak leadership. 1 2 3 4 5 6 7 PERFORMANCE
    • 6. Shoot for three measures in your incentive compensation plan. Pushing that to 4 or 5 is sometimes justified, but when you hit 6 and 7, employee performance drops dramatically. ATONEMENT
    • 7. OVER-SHARING THE WEALTH
    • 8. How many checks do you cut on a single sales deal? A few? A few dozen? One hundred and sixty-one? If you’re paying team members whose contribution isn’t clear, then there’s a good chance you’re overpaying, and that the link between performance and payment is broken. 1 DEAL
    • 9. About 75% of companies pay five people on a typical deal. Stay up to date on who contributes, and develop a pay structure accordingly. Let incentives drive and influence specific actions. ATONEMENT
    • 10. DEMOTIVATING MEASURES
    • 11. These discouraging practices summon the wrath of the sales team and weaken the connection between behavior and reward. Capped Commissions Holds & Releases Payment Timing
    • 12. Drop those infernal caps. They prevent sales reps from reaching their full potential. Drop the holds. Don’t turn your sales reps into collection agents. Pay on time. Paying months in arrears is demotivating. ATONEMENT
    • 13. ERODING PROFITABILITY
    • 14. Unexpected payouts to sales reps can cut into your business’s profits. Example: Accelerators. They’re a great tool for motivating your team to sell more, but you have to keep your eye on the budget
    • 15. Avoid unpleasant surprises by modeling not one, but several budget scenarios in your plan-design phase. Try these three: 1. What do you expect your sales performance to be? 2. What if a few high performers carry the company and earn far more than planned? 3. What if a big percentage of reps outperform the plan? ATONEMENT
    • 16. INABILITY TO MEASURE SUCCESS
    • 17. It’s good when your gut tells you that your organization is doing great, isn’t it? NOPE. A solid incentive compensation plan is built around data, not intuition or conjecture.
    • 18. Use benchmarks derived from hard data to measure performance. ATONEMENT Use the approach that’s right for you: benchmarking against an aggregate group, against industry standards, or self- benchmarking against company goals.
    • 19. LACK OF TRACEABILITY TO SALES BEHAVIOR
    • 20. A solid foundation of data is one of the “thou shalt haves” of business. If information you need is swirling around a murky pool of data, then your compensation plans more than likely are based on intuition rather than facts, and audits will be a nightmare.
    • 21. Ensure that anyone who earns incentive compensation can trace every payment back to a particular behavior or business event. ATONEMENT
    • 22. INCENT RIGHT www.xactlycorp.com

    ×