Sales Compensation Solutions: Addressing the Toughest Sales Incentive Issues in Today’s Changing World
A practical guide to designing and implementing sales compensation plans that motivate salespeople and drive profitable growth amid a rapidly changing selling environment.
Written by the sales-force effectiveness experts at ZS Associates, Sales Compensation Solutions tackles the toughest, most current challenges in sales incentive compensation—from aligning pay with changing multichannel sales roles and motivating a generationally diverse workforce, to driving profit rather than just revenue, going global, using analytics, setting motivating quotas, and managing plan change. Grounded in decades of consulting with hundreds of sales forces and annual Incentive Practices Research, the book blends strategic insight, pragmatic frameworks, and illustrative case studies to help sales, HR, finance, and operations leaders create plans that are fair, fiscally responsible, and aligned with a cohesive sales strategy. It argues that compensation is powerful but never a stand-alone cure-all, and shows how to make it work within the broader sales-force system.
The model it argues
A causal model linking selling-environment conditions and sales compensation design levers, through psychological and behavioral states of the sales force, to sales-force and business outcomes, moderated by system alignment, quota quality, and change management.
Key ideas
- Selling Environment Change
- External market forces reshaping buying and selling behavior and pressuring compensation to adapt.
- Pay Level
- Target total compensation reflecting role value and market benchmarks.
- Pay Mix
- The salary-to-incentive split of target pay.
- Incentive Metrics
- Performance measures determining incentive payouts.
- Payout Formula
- The mapping from performance to incentive payout.
- Sales Role Alignment
- Degree of fit between sales roles/compensation and evolving customer buying and channel needs.
- Individual Influence and Measurability
- Extent to which an individual can influence and be accurately measured on sales outcomes.
- Quota Quality
- The reasonableness, fairness, simplicity, and administrability of quotas.