PHASE 11: COMPENSATION DESIGN & QUOTA SETTING
Sales compensation plans that enable the company to achieve its revenue targets and maximize incentive compensation to reps that deliver results, without breaking the bank.
Best-in-class compensation plans align sales performance to corporate strategic objectives; they help attract and retain A-players and drive the desired selling behavior and performance, positioning the company for greater success.
1. The compensation plans drive behaviors that align to the organization’s objectives, strategy and roles.
2. Our sales compensation plans are industry competitive and enable us to attract and retain top sales talent.
3. The ratio of base salary to target variable incentive (i.e. target pay mix) is tailored to the selling role.
4. The plan creates a strong relationship between pay & performance and has significant upside opportunity.
5. The plan contains no more than 3 measures and each measure represents > 20% of earnings opportunity.
6. Territories are balanced on revenue/bookings opportunity and earnings potential.
7. At least 50% of your sales reps achieved quota last year and at least 90% of reps earned some incentive.
8. We are able to forecast sales results and set quotas within 10% accuracy.
9. Sales leaders and reps can clearly articulate the compensation plan and plan mechanics.
10. We have the right systems to accurately measure results and administer the plans in a timely fashion.
• Compensation Deliverables & Tools:
o Current Plan Assessment (incl. Market Pricing & External Benchmarking)
o Compensation Plan Design (incl. Pay Levels, Pay Mix, Measures & Weights)
o Financial Models (incl. Organization Summary and Rep-Level Impact)
o Compensation Calculator (incl. Payout Tables & Sample Calculations)
o Communication Material (incl. Plan Documents, FAQ Sheet, Terms & Conditions, & Train- the-Trainer)
o Sales Rep Survey
• Quota Deliverables & Tools:
o Account & Territory Potential
o Rep Production Capacity Model
o Quota Setting & Assignment Methodology
o Quota Setting Process
o Quota Stress Testing
o Sensitivity Model (i.e. Forecast vs. Payout)
• Design Committee Global Governance Framework
• Communication Plan