Companies Changed Sales Comp to Reward Profitability

December 3, 2009 (PLANSPONSOR.com) - A new study by WorldatWork found that nearly two-thirds of organizations changed sales compensation plan design in 2009.

According to “The Survey of Sales Incentive Plan Revisions 2009,” the revisions placed more emphasis on sales profitability (35% in 2009 versus 22% in 2008). In addition, more organizations (35% in 2009 versus 25% in 2008) changed performance measures to place greater emphasis on business development, winning new business, and selling new products.

Looking ahead to 2010, better sales profitability is a major concern for 40% of organizations surveyed. Organizations said they will design sales compensation plans to drive both improved business results in top-line revenue as well as margin in 2010.

A majority of organizations are changing sales metrics to improve the alignment between business strategy and sales execution.

The survey also found nearly half of organizations see a need to decrease plan complexity and plan to do so by reducing performance measures or simplifying payout formulae.

The survey was conducted in August 2009 among 977 U.S. WorldatWork members. The survey report is here.

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