Complete Guide to Sales Force Incentive Compensation

Complete Guide to Sales Force Incentive Compensation : How to Design and Implement Plans That Work

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Description

"If you're like most sales leaders, your incentive program is a constant challenge, as you try to jumpstart sales, energize a geographically dispersed and autonomous workforce, and motivate salespeople to achieve ambitious revenue goals. And sometimes it seems like you just don't know what works; your products and markets are changing, the incentive program that was so successful last year no longer produces the desired results, or perhaps the generous incentive program you created has yielded a corps of highly paid salespeople who spend most of their time on existing clients and minimal time generating new business - and threaten to walk away with your customer base if you scale back paychecks! Incentive programs are seductively powerful but complicated instruments. Without careful planning and implementation, they can be too stingy to motivate, too complex to understand, too quick to reward mediocre results, and too difficult to implement. But a well-designed and implemented incentive program is an essential tool for building a motivated, highly effective sales force that delivers the results you need. "The Complete Guide to Sales Force Incentive Compensation" is a practical, accessible, detailed roadmap to building a compensation system that gets it right by creating motivating incentives that produce positive outcomes. Packed with hundreds of real-life examples of what works and what doesn't, this important guide helps you: understand the value of building an incentive plan that is aligned with your company's goals and culture; avoid the common trap of overusing incentives to solve too many sales management problems; measure the effectiveness of your current incentive program, employing easy-to-use tools and metrics for pinpointing its weak spots; design a compensation plan that attracts and retains successful salespeople, including guidelines for determining the correct pay level, the best salary incentive mix, the proper performance measures, and the right performance payout relationship. Select an incentive compensation plan that works for your organization - then test the plan before it is launched; set territory-level goals that are fair and realistic, and avoid overpaying the sales force because goals are too easy, or demoralizing salespeople by having goals that are too difficult or not fairly assigned; create and manage sales contests, SPIFFs (Special Performance Incentive for Field Force), and recognition programs that consistently deliver the intended results; manage a successful transition to a new compensation plan and build efficient administration systems to support your plan. Every year, corporations spend $200 billion compensating their sales forces, with extremely mixed results; and make sure every dollar you spend is helping to achieve your goal of creating an empowered, effective sales force that drives your company's success. Packed with ready-to-use formulas and assessment tools and a wealth of insights from frontline sales managers and executives, "The Complete Guide to Sales Force Incentive Compensation" is your hands-on, easy-to-read playbook for crucially important decisions."show more

Product details

  • Hardback | 496 pages
  • 180.34 x 256.54 x 43.18mm | 1,179.33g
  • Amacom
  • New York, United States
  • English
  • 0814473245
  • 9780814473245
  • 609,577

Review quote

"Andris Zoltners, Parbhakant Sinha, and Sally Lorimer wrote a definitve book on this topic, The Complete Guide to Sales Force Incentive Compensation: How to Design and Implement Plans that Work (Amacom, 2006). It's about 500 pages long and costs $65. That may sound expensive until you realize that's the cost of about 30 minutes of consulting, and less than the price of one 'please don't leave us to work for our competitor' lunch, I highly recommend it." --Michelle Nichols, BusinessWeek.com columnistshow more

About Andris A. Zoltners

Andris Zoltners is a professor of marketing at the Kellogg School of Management at Northwestern University. Prabhakant Sinha teaches courses on sales force effectiveness at Kellogg and the Management Centre Europe. They are founders and co-chairmen of ZS Associates, a global business consulting firm and coauthors of The Complete Guide to Accelerating Sales Force Performance. Sally Lorimer is a consultant specializing in sales and marketing and a former principal at ZS Associatesshow more

Table of contents

"Preface viii Acknowledgments xi Chapter 1 Sales Force Incentive Compensation and the Successful Sales Organization Introduction 2 The Drivers of Sales Force Compensation Change 12 The Sales Force Compensation Challenge 17 The Sales Management System 19 The Role of Incentive Compensation Within the Sales Management System 23 Diagnosing Sales Force Issues 29 How This Book Is Organized 32 Chapter 2 Reviewing a Current Incentive Compensation Plan and Setting Objectives for a New Plan Introduction 40 Is It Really an Incentive Compensation Plan Problem? 41 An Overview of a Sales Incentive Plan Assessment Process 44 Assessment of Current Sales Compensation Plan Consequences 45 Assessment of Current Sales Compensation Plan Consistency and Compatibility 76 Developing New Plan Objectives 83 PAGE v v ...15869$ CNTS 05-19-06 09:21:54 PS vi Contents Chapter 3 Plan Design Fundamentals Introduction 93 Sales Compensation Plan Design Terminology 94 Chapter 4 Plan Design Part 1: Determining the Correct Pay Level Is Your Sales Force Pay Level Correct? 108 The Range of Sales Force Pay Levels 112 How to Determine the Right Sales Force Pay Level 115 Conclusion 137 Chapter 5 Plan Design Part 2: Finding the Best Salary-Incentive Mix Introduction 141 Do You Have the Right Pay Mix? 143 The Range of Salary-Incentive Mix 151 How to Determine the Right Salary-Incentive Mix 160 A Pay Mix Scorecard 179 Chapter 6 Plan Design Part 3: Selecting Performance Measures Are You Using the Most Appropriate Performance Measures to Determine Your Incentive Plan Payout? 184 Types of Measures 187 How to Determine the Most Appropriate Sales Incentive Measures: An Advisory 192 How to Determine the Most Appropriate Sales Incentive Measures: Specifics 198 Chapter 7 Plan Design Part 4: Determining the Right Performance-Payout Relationship Introduction 226 Is the Most Appropriate Performance -- Payout Relationship Used for Determining the Incentive Plan Payout? 227 Representing Performance -- Payout Relationships 228 Decision 1: Bonus Plan or Commission Plan? 231 Decision 2: Progressive or Regressive Plan? 237 Decision 3: Caps or No Caps? 243 Decision 4: Pay from the First Dollar or from Goal or a Fraction of Goal? 245 Decision 5: Single Measure or Multiple Measures? 251 Concluding Insights 261 Chapter 8 Evaluating Proposed Sales Incentive Compensation Plan Alternatives and Selecting a New Plan Introduction 265 An Overview of Candidate Sales Compensation Plan Assessment 267 PAGE ...15869$ CNTS 05-19-06 09:21:55 PS vi Contents vii Quantitative Assessment of a Candidate Sales Compensation Plan 271 Qualitative Assessment of a Candidate Sales Compensation Plan 295 Future-Proofing Assessment of a Candidate Sales Compensation Plan 306 Conclusion: From Objectives to Reality 308 Chapter 9 Setting Effective Goals and Objectives Introduction 313 Are Your Sales Force Goals Appropriate? 314 Types of Goals 327 How to Set Effective Sales Force Goals: a Five Step Process 330 Tracking Performance Against Goals 369 Goal-Setting Recommendations 372 Concluding Insights 375 Chapter 10 Increasing Sales Force Motivation Through Sales Contests, SPIFFs, and Recognition Programs Introduction 378 Sales Contests and SPIFFS 380 Recognition Programs 403 Insights 407 Chapter 11 Making an Effective Transition with a Major Incentive Compensation Plan Change Introduction 410 Sales Incentive Compensation Plan Change and the Sales Management System 415 Challenging Sales Incentive Compensation Plan Transitions 421 A Sales Force Change Process Framework 435 Chapter 12 Incentive Compensation Plan Administration Introduction 454 Is the Incentive Compensation Plan Administered Well? 458 IC Plan Administration Systems and Processes 461 How to Design an Effective IC Plan Administration System 476 Summary 489 Index 491 About the Authors"show more
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