How to Plan, Implement, and Monitor Your Sales Compensation Program
Maria Oczko-Canant is an experienced sales compensation and performance management professional with over fifteen years of helping organizations automate and optimize complex sales compensation programs, plans, and processes.
Currently, she is the Head of Global Sales Planning and Incentive Compensation at Workiva, a cloud-based software that transforms the way you work with risk and reporting solutions that connect people, data, and processes all in one place.
In a conversation with Justin Lane, Maria explores a wide range of topics that pivot around key aspects of sales performance, including designing, implementing, and monitoring sales compensation plans.
Listen to this episode of The Sales Compensation Show to learn:
- The reason SPM tools can radically improve your processes
- Why revisiting targets more frequently can be highly effective
- How to use a competency model to drive sales performance
Three key takeaways:
#1: SPM tools can radically improve your processes
Sales Performance Management (SPM) tools revolutionize sales compensation processes by automating calculations, streamlining workflows, and providing invaluable insights. These tools eliminate manual errors and ensure accurate and timely compensation payouts, ensuring salespeople trust and understand their earnings.
SPM tools align sales compensation with strategic objectives, driving desired behaviors and outcomes. Through powerful analytics and reporting capabilities, sales managers can track performance, identify opportunities, and make data-driven decisions. The agility of SPM tools allows organizations to quickly adapt compensation plans to evolving business needs.
Our entire process got revamped. It wouldn’t have been possible without having the data an SPM solution provides.Maria Oczko-Canant, Workiva
Maria told us her company underwent two unsuccessful implementations before finding the right SPM tool. She said they found success when they prioritized answering four questions:
- What are the true requirements of our comp?
- What does it take to execute the results we want?
- What data do we need to improve our processes?
- What do sales expect to see from the solution?
Her entire sales compensation process was revamped when they successfully implemented an SPM solution. Without an SPM tool, her team had to manage $1.4 million in payroll adjustments in 2021. But the following year — after a successful implementation — that number went down to just $2,000 total.
It’s evident SPM tools optimize sales compensation processes, enhance transparency, align incentives, provide performance insights, and ultimately drive revenue growth.
Maria outlines this change at 7:35 in the podcast.
#2: Revisiting targets more frequently can be highly effective
Most B2B companies roll out new sales compensation plans annually. But setting more frequent targets and quotas can be highly effective for several reasons:
Firstly, shorter compensation cycles, such as semi-annually, creates a sense of urgency and motivation among sales teams. The proximity of reward payouts encourages salespeople to consistently strive for high performance, resulting in increased productivity and a more competitive sales environment.
Secondly, frequent compensation plans provide real-time feedback and visibility into sales performance. Sales reps can quickly gauge their progress and make necessary adjustments to meet their targets. This immediate feedback loop allows for timely course correction, ensuring that sales activities and strategies are aligned with organizational goals.
Our reps like semi-annual plans because there is an opportunity for full accelerators and kickers twice per year.Maria Oczko-Canant, Workiva
Thirdly, shorter compensation cycles enable faster recognition and reward for exceptional performance. Salespeople receive more frequent payouts or incentives, which reinforces positive behaviors and boosts morale. This timely recognition helps maintain high levels of motivation, engagement, and job satisfaction, ultimately leading to improved sales outcomes.
Additionally, more frequent compensation plans allow for greater adaptability to changing market conditions. In fast-paced industries, business priorities and product strategies may shift rapidly. By designing compensation plans with shorter intervals, organizations can quickly align incentives with evolving market dynamics, ensuring that sales teams focus on the most relevant products, services, or customer segments.
Moreover, frequent compensation plans facilitate agility in experimenting with new initiatives or promotions. Organizations can introduce time-limited incentives or sales campaigns within a shorter timeframe, measure their effectiveness, and make data-driven decisions to refine or expand those initiatives. This flexibility promotes innovation, as sales teams are encouraged to explore new approaches and capitalize on emerging opportunities.
Lastly, more frequent compensation plans provide enhanced visibility into sales performance data. Sales managers can monitor individual and team performance, identify trends, and gain actionable insights to optimize sales strategies. This data-driven approach allows for targeted coaching and performance improvement, enabling sales teams to continually raise the bar and achieve higher levels of success.
#3: Incorporate a competency model to drive sales performance
A competency model typically includes a set of core competencies that are essential for effective sales performance, such as product knowledge, communication skills, negotiation abilities, relationship building, customer service orientation, and goal orientation. These competencies can vary depending on the nature of the sales role and the organization’s sales strategy.
The competency model serves as a reference point for sales compensation design and monitoring. It is the key to determining the criteria for evaluating sales performance and aligning comp plans with desired outcomes. By identifying the specific competencies required for success, the model assists in setting performance expectations, providing targeted training and development opportunities, and recognizing high-performing salespeople.
Sales compensation plans often incorporate performance metrics and incentive structures that are directly tied to the competencies outlined in the model. For example, a commission structure may reward sales reps based on their ability to maintain good CRM hygiene or meet specific sales targets.
Our competencies are being used to drive initiatives and ensure that we are incentivizing the right behaviors.Maria Oczko-Canant, Workiva
Maria told us that her company recently introduced a competency model that included 26 metrics across 600 sales reps. To track the competencies, payouts were gated for both performance and metrics. Gating the payouts helped change the behavior of the top sellers, who would typically only do proper reporting of some calls. Once the top performers filled in their reports, it became easy to identify success markers shared with the rest of the team for better achievement across the board.
Maria walks through her competency model in full depth at 19:44 in the podcast.Great insights from Maria Oczko-Canant on how to plan, implement, and monitor your sales compensation program 🚀 Click To Tweet
The Sales Compensation Show is brought to you by Forma.ai, the world’s first Sales Comp Ops solution. Find us by searching sales compensation on Spotify, Apple Podcasts, Google Podcasts, and YouTube.
Are you interested in learning more? Have a conversation with one of our sales comp experts here.