Sales Performance Management: Enterprise Incentive Management from Accenture

Accenture research has found that despite its importance, the sales function in many companies is not excelling—for two significant reasons: insufficient employee awareness of corporate sales strategy and basic shortcomings in the behaviors and capabilities of sales people.

Some companies have attempted to address these shortcomings by creating a pay-for-performance culture—shifting more of what they pay people from fixed to variable compensation—in the hope that money will provide sufficient motivation to exhibit behaviors consistent with the company’s strategic direction. Yet in doing so, many have confronted a cold reality: The process and technologies on which they have long relied to devise and administer incentive compensation plans are woefully inadequate to meet today’s unpredictable business environment. Changing customer demands require more agile sales strategies and far more flexible incentive management programs. While companies expect to use variable and incentive compensation to motivate the sales force, the shortcomings of their current capabilities for managing incentives often compel them to take overly reactive measures to accomplish this.

Accenture’s research and client experience reaffirms that a new approach to incentive management can eliminate the shortcomings common in most companies and, in the process, transform an incentive compensation plan into a tool that truly influences the “right” sales force behaviors. Such an approach also can play an important role in more effective people development, which Accenture has found to be critical to building a high-performance anatomy—the culture and organization that enables some companies to consistently out-execute their competitors.

Key to the success of this new approach is the view that a company’s incentive management capability must do more than simply issue paychecks accurately and efficiently. To reinforce desired sales force behavior, an enterprise incentive management capability must clearly demonstrate to sales participants the link between what they sell and what they earn. Only when salespeople can make an explicit connection between their paychecks, the compensation plan and, ultimately, the company’s sales and corporate strategy will their selling behavior more consistently align with desired sales strategy.

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