Dec. 2, 2009 – Washington, D.C. – In this difficult economic climate, many organizations are finding it more challenging than usual to meet their sales and revenue goals. As companies struggle to find ways to improve sales and profitability, the first place they look to adjust is their sales compensation plan.
A new study by WorldatWork, “Survey of Sales Incentive Plan Revisions 2009,” found that nearly two-thirds of organizations changed sales compensation plan design in 2009. The revisions placed more emphasis on sales profitability (35% in 2009 versus 22% in 2008). Looking ahead to 2010, better sales profitability is a major concern for 40% of organizations surveyed. 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.
“New sales compensation plans at many companies are an annual event,” said Jim Stoeckmann, sales compensation practice leader for WorldatWork. “Nearly two-thirds of U.S. companies made changes to their plan designs in 2009; nearly 80% reported making changes at least every two years. This year, the emphasis was on top-line improvement through winning new business and selling new products but the big constant in sales compensation is change!”
Key findings:
-Organizations 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.
-Nearly half of organizations see a need to decrease plan complexity and plan to do so by reducing performance measures or simplifying payout formulae.
About the Survey
The Survey of Sales Incentive Plan Revision 2009 was conducted in August 2009. Surveys were sent electronically to a random representative sample of 8,339 U.S. WorldatWork members. A total of 977 members participated in this survey, generating a 12-percent response rate. This high response rate and a similar demographic profile between survey respondents and the general WorldatWork membership provides a high level of confidence regarding the validity of the data. The first survey of this kind was conducted in 2008. For a copy of the survey, click here.
About WorldatWork®
The Total Rewards Association
WorldatWork is a global human resources association focused on compensation, benefits, work-life and integrated total rewards to attract, motivate and retain a talented workforce. Founded in 1955, WorldatWork provides a network of more than 30,000 members and professionals in 75 countries with training, certification, research, conferences and community. It has offices in Scottsdale, Arizona, and Washington, D.C.
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