Sales incentive plans are an essential tool to drive business results if designed and communicated properly. They align sales objectives with business strategy, provide competitive compensation, communicate priorities to sales employees, differentiate performance, and reward achievement. Effective plan design establishes governance, eligibility, pay mix, key performance measures tied to objectives, measure weightings, incentive formulas, performance periods, and sales crediting rules. Plans must also be monitored, payments made on time, calculations communicated clearly, and the plan adapted when business conditions change to ensure it continues meeting its goals.

1. Sales Incentive Plans
An essential tool to drive business results
…
If designed and communicated right.

2. Why have any Sales
Incentive Plans?
 Aligns sales objectives with business
strategy
 Provides competitive total compensation
 Communicates how you want your sales
employees to spend their time
 Differentiates performance and pay
 Rewards employees for achieving
obtainable results

3. Sales Plan Design Elements
 Establish the plan’s governance parameters
 Determine who is eligible
 Set the right pay mix / leverage for each sales job
 Define the key performance measures that drive business objectives
for the role (controllable, measurable, reportable, accurate)
 Set the right weighting for each key measure
 Determine the incentive plan formulas (entry points, pay lines, caps,
hurdles, accelerators)
 Establish the performance period to be measured and rewarded
 Create the Plan Document including relevant sales crediting rules

4. Keeping the Sales Plan
Relevant
Monitor and report on results
Make payments on time
Communicate how the payments are determined
Change the plan when business conditions change
Make sure the Plan is doing what you wanted it to