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It Takes Two: People and Performance Analytics for Sales Compensation

Sales compensation dashboards are common, but they usually only tell half the story.

There are actually two sides to your dashboard that lead to growth: productivity metrics and people metrics. Looking at only one side will only give you half the picture.

Many organizations determine if their sales compensation plans are working by gathering ad hoc information and doing spot analytics. But choosing among a multitude of possible metrics can be difficult – which are the right metrics? Which will have the deepest impact on growth? Which provide the full picture of the sales organization performance, and not just a surface level evaluation?

For example, looking at quota distribution might indicate that you have a quota allocation problem. However, a closer analysis might reveal that’s it’s actually a productivity problem. This new interpretation could take you in a totally different plan design direction.

When we look at a sales compensation program, we look for what the five key productivity metrics below can tell us: 

  1. Pay and performance alignment
  2. Composition of pay
  3. High performer differentiation
  4. Performance distribution
  5. Year over year trends and patterns

The other side of your dashboard – the people side – is less often utilized, but is the only way to complete the picture. The people side tells you how the people in your organization are motivated by the plan, and how it affects their behavior, and possible organization risks with the plan.

We also analyze what the following five people metrics can tell us:

  1. Understanding of the strategy
  2. Job role priorities
  3. Perceived plan competitiveness
  4. Perceived plan alignment
  5. Motivational power

Combining both the people and the performance side of the dashboard tells you whether your team is performing as expected, whether their behaviors are driving the strategy of the organization, and whether or not they are motivated to act in those strategic directions.  How do you select the right metrics? Interpret the data? How do you take action based on your data and lead your team to growth?

I’m heading to the IBM World of Watson 2016 conference later this month to be a part of their Sales Performance Management discussions. I’m excited by the power of data we have today – it’s incredible what good information can tell us – and this new era of cognitive business solutions. It’s a game changer.

If you’re planning to be at the conference, I’d love to connect. Stop by the IBM Incentive Compensation Management booth. I can also be found in the IBM mobile app. Or as always, you can reach me at mark.donnolo@salesglobe.com.