Design trends and expectations for 2014 - Hay Group webinar jan 14 2014.pdf · Enterprise Sales...

Enterprise Sales Effectiveness Webinar Design trends and expectations for 2014

JANUARY 2014 MARC WALLACE & AMANDA WETHINGTON

2 © 2014 Hay Group. All rights reserved

Agenda

2013 Sales Plan Design & Practices Survey

Sales Effectiveness Insights

Expectations for 2014

Q & A

1

2

3

4

2013 Sales Plan Design & Practices Survey


Hay Group sales survey

Our 2013 Sales Compensation, Plan

Design & Practices survey

More than 400 organizations in the overall database

259 organizations submitted plan design information


Plan design by role

Plan design

Position

Percent offering

performance-based

bonus

Percent offering

commission

Sales Director 48% 40%

Sales Manager 81% 57%

Key Account Manager 71% 49%

Business Developer 54% 46%

Sales Representative 71% 74%

Account Manager 56% 49%

Inside Sales 45% 55%


Elasticity

Level

Pay performance matrix

Median value Average Range (low) Range (high)

Threshold

Performance 80% 73% 10% 99%

Threshold

Payout 50% 45% 0% 96%

Maximum

Performance 150% 155% 100% 300%

Maximum

payout 200% 200% 100% 1000%

The table below outlines the typical pay for performance elasticity.


Plan components & measures

Plan Components –

Performance level Prevalence

Individual 78%

Business Unit / Division 23%

District / Region 11%

Country 21%

Corporate / Global 22%

Team 15%

Other 5%

Most Common

Measures Prevalence

Revenue / Growth 71%

Profit / Profit Growth 58%

Units Sold 22%

Market Share 9%

Acct Rec / DRO 9%

Objectives 8%

Customer Satisfaction 9%

Discretionary 13%

Other 4%


Commission design

Mechanism Prevalence

Straight commission 56%

Commission with a

quota 68%

Other form 12%

Design type Prevalence

Flat design 44%

Accelerating design 51%

Decelerating design 4%

Other 12%


Performance results

Design type 2011

Results

2012

Results

2013

Results

Below threshold 11% 13% 15%

Threshold to target 42% 42% 44%

Target to 1.5x target 35% 41% 35%

Maximum 12% 4% 5%

2013 Challenges


Core presenting issues

Trends we are observing in the market

Goal setting challenges and fairness

Choosing the ‘right’ measures

On-boarding / turnover

Globalization

Market competitiveness and retention

ROI

Defining career paths

Sales management structure


CASE STUDY: goal setting

What we did

Leadership felt the current incentive plans did not distinguish top performers from

average ones.

The existing plan structure had a large discretionary component and budgeting for

goals was extremely challenging.

Hay Group evaluated the positions to our sales models, discussed plan options with

leadership.

The result was

We were able to construct an incentive arrangement that recognized annual and

medium-term performance periods.

A Chemicals company sought to create a motivating

incentive plan for its Account managers.


CASE STUDY: Choosing the right measures

A large retail company had multiple recognition plans in

place, but were concerned the these legacy plans did garner

focus nor support the desired customer experience in either

the boutiques or factory stores

What we did

Hay Group reviewed the recognition plans and compared to best practice. We established that

there was an opportunity to combine the plans and still reflect volume and margin differences

between different types of stores.

Hay Group developed streamlined plans based on interviews with managers and top performing

associates. We tested these plans against other plans in the retail industry to ensure strategic fit.

The retail practice at Hay Group was able to further identify and implement best practices for all

compensation vehicles, ensuring that the recognition plans were in the appropriate context.

The result was

The organization was able to implement a more impactful, visual and strategically relevant

recognition plan while saving on the spend by 10% to 15%.


CASE STUDY: global sales incentive design

A global financial services organization sought to

make its country incentive plans consistent across

regions and further align to its U.S. framework

What we did

Hay Group leveraged our presence in over 40 countries world wide to provide

benchmarking data, then applied best practices based on Enterprise Sales

Effectiveness research.

We conducted a comprehensive survey of plans in similar organizations to understand

practices overall.

We worked with the leadership team to understand how these roles work as a team

and region and to assess the impact each role has on individual performance.

The result was

We identified several plan design options and provided recommendations for moving

forward. Through working sessions, we assisted with finalizing the designs.


CASE STUDY: Role analysis

This organization sought to assess the levels of work within

its sales operations function following a centralization of the

various groups to ensure they were fair and consistent to all

employees.

What we did

Employees completed a position description questionnaire to describe their role.

Hay Group met with the managers to learn about the roles within the sales operations

functions.

Using Hay Group’s work measurement methodology, we assigned levels of over 75

unique positions within sales operations.

The result was

A consistent leveling structure within centralized sales operations to assist with

compensation decisions, career path design and organizational development.


CASE STUDY: market competitiveness

One organization sought to update their incentive plans to

more deeply support the Sales and Professional Service

groups individually, while also creating alignment and

collaboration across the two groups.

What we did

Hay Group facilitated two onsite roundtable session to understand the current roles,

reviewed the goals and objectives of the organization and developed plan design

frameworks to support the organization’s strategy.

Hay Group assessed the market compensation levels of base salary, total cash, target

incentive percent and pay-mix. We also provided plan design benchmarking data for

the roles using information from our annual sales design survey.

The result was

The result was a greater alignment of the roles within the two groups and across the

incentive plans to drive the desired behaviors in support of the organization strategy.

Expectations for 2014


How to approach 2014

Steps for an effective 2014

Communicate plan changes – what stays the same vs. what is different

Determine how you will measure the plan effectiveness

Review the tools in place to hire the most effective people

Support development and leadership training opportunities


Sales incentive and effectiveness audit

Attribute Level one questions (triage)

1. Sales strategy Is the sales strategy clear, consistent and well understood?

2. Process Does the sales process meet business objectives and create customer

value?

3. Roles &

competencies

Are sales roles, competency models and job definitions comprehensive and

actionable?

4. Size & structure Is the sales force designed for optimal effectiveness and efficiency?

5. Motivation Are sales people motivated by an appropriate mix of incentives and

rewards?

6. Management Is sales management disciplined and focused on performance?

7. Culture Is the required sales culture defined, cultivated and managed?

8. Implementation Is seamless integration achieved within sales and across functions?


Our sales effectiveness framework

Optimal

alignment of

inputs for sales

effectiveness

Sales process &

training

Size, structure &

career paths

Hay Group’s ESE

team advises on

all aspects of

sales

effectiveness.

We make sure an

organization’s

sales strategy is

aligned with its

overall strategy

and is as

effective as

possible

Questions?


Let’s talk - Contact our team [email protected] +1.312.228.1816 [email protected] +1.312.228.1853 www.haygroup.com/us/ESE

mailto:[email protected]



http://www.haygroup.com/us/ESE

Design trends and expectations for 2014 - Hay Group webinar jan 14 2014.pdf · Enterprise Sales...

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