Using Compensation Plan Mechanics To Drive Sales Behavior

January 1st, 2018

Summary

There are three sales performance milestones: threshold, target, and excellence. Use decelerators to hasten quota attainment beyond threshold levels. Most B2B organizations set plan mechanics so that salespeople earn 300 percent of their target incentive upon achieving the excellence performance milestone.

Companies modify sales compensation plans every year in order to change behaviors to align with updated corporate goals and strategies. The financial rewards and consequences that sales management uses to redirect sales behaviors are called plan mechanics (e.g., accelerators, decelerators, performance hurdles, performance links). In this report, we illustrate the interdependence between plan mechanics’ pay curves and performance milestones and show several design and combination options that can be used to drive sales performance.

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