What's happening in the realm of sales compensation as we move out of some of the most challenging sales years in recent memory? A recent WorldatWork survey (report available to premium members on the site), which features the responses of 516 members, allows us a look at the current state of practice and design.
A few select outtakes and observations from survey results:
Pay Mix: Steady as She Goes (on average, at least)
Historically, the traditional B2B sales rep has seen an actual average pay mix (relative proportion of base and variable pay) of 70%/30%. According to the WorldatWork survey results, things haven't changed much: Most sales roles today see an average actual pay mix between 60%/40% and 70%/30%.
Number of Performance Measures: Less is More
The majority of responding organizations (75%) use three or fewer performance measures in their sales compensation plan.
Types of Performance Measures: Top Line Still King
Total revenue was the most prevalent performance measure for all sales roles except new account sellers, which was more likely to use new account revenue. Gross margin and key sales objectives were the next most common performance measures. It would also appear (at least based on my recollection of past sales comp research and my own experience) that MBO type measures continue to gain ground in prevalence; the survey notes that about one third of respondents use these measures (key sales objectives/milestones) across all primary sales roles ... and they are most popular (41%) for first line sales manager positions.
Individual performance measures still dominate sales comp metrics for all positions except the first line sales manager, where 90% of respondents use either team performance alone or a combination of team and individual performance in their plan.
Plan Design Changes: A Historic 2010
2010 was the first year in the study's historical reference (which extends back to 2005) that more organizations (55%) chose not to revise their sales comp plans than chose to revise them. Interesting.