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September 15, 2009
Employers Explore Changes to Sales Incentive Plans

Many large employers are planning to make changes to their sales incentive plans during the upcoming fiscal year, such as changing performance measures (60 percent), changing performance measure weightings (50 percent), changing incentive formulae or mechanics (49 percent), and changing their pay mix (20 percent), according to a survey by Watson Wyatt, a consulting firm.

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Conducted among 129 large employers, the survey found that 60 percent of respondents said sales force productivity and efficiency remains a significant concern. Forty-eight percent of employers said sales force quota and goal setting is a concern. Just 47 percent of respondents said they are satisfied or very satisfied with their goal-setting processes.

The survey also found that fewer employers are planning more sales force layoffs as the economy shows signs of improvement. Sixteen percent of respondents said they plan to increase sales staffing levels in upcoming fiscal year. By contrast, 12 percent said they anticipate decreasing their sales staffing levels, down from 53 percent who said the same in February.

Meanwhile, voluntary turnover has declined, with 81 percent of respondents reporting less than 10 percent voluntary turnover, down from 51 percent who said the same in February.

“Optimistic forecasts are good news for sales forces, which can look forward to fewer layoffs and potentially higher compensation,” said John Bremen, global director of sales effectiveness and compensation at Watson Wyatt. “Yet with budgets still tight, many companies will look to get more out of their current salespeople for next year and to align incentives with changing business objectives.”

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