Performance is critical in any sales process. It will dictate the length of time a prospect will remain interested and engaged, as well as determine how much of your products they will eventually purchase. Performance also is a significant factor in determining your future career path. You want to maximize your performance as well as the performance of your entire sales organization as a sales professional. The objective is to identify and reward those sales representatives who are maximizing performance while identifying and removing flaggers who are not performing at a desired level but show promise of improving. Automated compensation management helps to mitigate the risk of poor performers and recognizes the value they bring to profitability. It also helps to ensure your top performers stay engaged and motivated.
1. The art of compensation management :
Your compensation management plan should be aligned to the goals of your organization, the strategies that are being instituted and the overall profitability of your sales force. You want to know the reason why you are being rewarded or penalized as a sales professional. It is important that your compensation management plan be clearly communicated. It is also important that the plan be fair and equitable, rewarding high performers and identifying low performers who need to improve in order to become high performers.
2. Know what your goals are :
Setting and meeting your sales goals is more important than the pay structure you might have in place. You want to be sure your sales force is focused on the overall goals of the organization. This can help you gain their cooperation in achieving those goals through sales compensation software management. It also helps to ensure that you are being fair and equitable with regard to the compensation management plan.
3. Know who is performing :
Identify the high performers in your company who will be rewarded for their performance. Identify all sales representatives and set a target base salary. The target base salary can represent either an individual sales representative’s average production or the aggregate production of an entire team of sales representatives. It is important to recognize sales talent and give them the opportunity to expand their career even further.
4. Establish specific performance levels :
The overall performance level should represent that of your average sales representative. This average should be boosted somewhat considering the overall profitability of your company and the goals you are trying to achieve as well as the increased competition within your industry and in your geographic region. It is important that you establish specific sales quota performance standards. You want to develop a template that your sales force can tailor to their particular business needs.
5. Manage individual performance :
It is important to be aware of the performance of each sales representative on an individual basis. There are several ways you can accomplish this, including observing the work of the sales representatives and then comparing those results with the posted targets. You might also have a chart showing your top performers and their average production so that you can monitor their progress and make adjustments where necessary. You should observe the performance of the sales representatives every couple of months and make adjustments accordingly.
6. Establish a clear communication path :
It is important that you establish an effective communication path between the sales and compensation departments. Sales representatives need to understand the compensation management criteria so they can meet the performance standards you have established. They also need to understand the types of performance criteria you are looking for in order to achieve your goals. It is important that everyone understands the plan so they can provide feedback to ensure the highest level of performance and a successful outcome.
ElevateHQ is a software solution provider for automated compensation management. It enables companies to create their own compensation management plan, aligning it to the goals of the organization, strategies and profitability of the sales force. It also helps define specific performance levels and manage individual performance.