How often do companies revise their sales compensation plans, and why? Did the recession make 2009 an unprecedented year in the volume of sales compensation revisions?
These and other questions are answered in new sales compensation research released earlier this month by WorldatWork. The research reflects the responses of 977 WorldatWork members on behalf of their employers.
Notable findings of the research include the following.
A majority of organizations report revising their sales compensation plans on an annual basis in recent years. The annual sales compensation review does not appear to be solely a 2008/2009 phenomenon; in fact, it is a pattern that dates back at least to 2005, as the table below shows (note that the research was apparently not conducted in 2007):
(In fact, there is a noticeable decrease in proportion of revisions over the four study years - a finding that the research authors and advisors see as a result of significant changes being made in response to strategy shifts occurring during the upturn in the middle of the decade.)
Improving alignment between sales incentive pay and business strategy is - far and above the most cited reason for sales compensation plan revision, particularly in the past two years.
The reasons tied for #3 above were the biggest gainers from the 2008 to the 2009 research results, jumping up 13% and 10% respectively, demonstrating that tough economic times have led companies to heighten the emphasis placed on sales profitability and winning new business.
All in all, very interesting research.