Differentiating Employee Value
Proposition for the Sales Force
Scott Sands
Global Practice Leader, Sales Force Effectiveness
Hewitt Associates
Presentation Overview
2
„
Elements of the Employee Value Proposition
„
Hypothesis 1: Sales people, as long suspected, will be highly
motivated by short-term cash compensation
„
Hypothesis 2: Senior sales reps’ criteria evolve to be different
from junior reps, specifically increasing value on noncompensation elements
„
Hypothesis 3: Both top performing and highly engaged reps
will be more focused on “Selling Environment” factors than
pure compensation, independent of geography
„
Findings and Conclusions
2009 Total Rewards Conference & Exhibition
The WorldatWork’s EVP Model
3
2009 Total Rewards Conference & Exhibition
Surveyed EVP Elements Specific to Sales
„
„
4
Direct Financial Compensation
‹
Base Salary
‹
Target Incentive
‹
Upside Availability
‹
Equity
Indirect Financial Compensation
‹
Healthcare
‹
Retirement
‹
PTO
‹
Company Car
2009 Total Rewards Conference & Exhibition
Surveyed EVP Elements Specific to Sales
„
„
„
5
Company Affiliation
‹
Company Strength
‹
Company Culture
Career Development
‹
Advancement Opportunities
‹
Training
Selling Environment
‹
Quota Size
‹
Leadflow
2009 Total Rewards Conference & Exhibition
Survey Methodology
6
„
Gathered responses from over 1200 sales representatives
and first line managers
„
Used online survey tool
„
Combined “rate-and-rank” questions with a “conjoint lite”
approach to determining trade-offs and preferences
„
Survey was open for two months during the Winter of 2009…
a unique economic period
„
There is a relatively even mix of industries, seniority,
geographies and hierarchy, but we are keeping the survey
open to encourage more submissions and monitor change
over time
2009 Total Rewards Conference & Exhibition
Why did we feel this research was critical?
„
7
The sales role is significantly different than other corporate
roles:
‹
Independent
‹
Remote
‹
Direct Line of Sight to Financial Results
‹
Customer Contact
‹
Pay Premium
‹
Risk Intense
„
We did not see previous research addressing unique aspects
of the sales role
„
Companies need high ROI tools for this economic period
2009 Total Rewards Conference & Exhibition
We see sales teams leaning heavily on
compensation, instead of other levers
Understand
Business Drivers
Customer Insight
Business Strategies
Align the Sales Force
Organization
Design
Talent
Management
Value Proposition
Competitive Dynamics
Performance
and Rewards
–
Selling and Service Model
–
Job Roles and Structure
–
Deployment Planning
–
Recruiting and Selection
–
Career Paths
–
Training and Development
–
Compensation and
Recognition
–
Quotas and Measurement
–
Performance Management
Realize Business
Impact
Creating a sales structure that
is effective in meeting
customer needs in an
efficient manner…
Ensuring the availability of the
right talent for the right role
at the right time…
Maximizing the productivity
of an engaged sales force to
exceed business goals…
We help our clients improve sales performance by getting the most
out of their investments in sales people, creating a rewarding
environment for sales people and company shareholders
8
2009 Total Rewards Conference & Exhibition
Even the sub-components of sales
compensation have unique appeal
1. Business Objectives, Sales Strategy, & Roles
9
2.
Eligibility
5.
Upside Opportunity
8.
Quotas/Crediting
3.
Target Pay Levels
6.
Measures/Weights
9.
Payout Timing
4.
Pay Mix
7.
Mechanics
10.
Administration
Competitive
Aligned
Effective
2009 Total Rewards Conference & Exhibition
Hypothesis 1: Sales people are highly
motivated by short-term cash compensation
Importance of Each Factor in Deciding Whether to
Stay in Role or Take Another
Variable Incentive Opportunity
Base Salary
Health Benefits
Percent of Respondents
Future Career Advancement
Retirement Benefits
Company Strength
Company Culture
Paid Time Off
Quota Size
Sales Training Provided
Value of Sales Leads Provided
Equity/Stock Grants
Recognition Trip
Company Car
0%
10%
Not a Consideration
10
20%
30%
40%
50%
Not Important, but Considered
60%
70%
Important
80%
90% 100%
Critical
2009 Total Rewards Conference & Exhibition
Hypothesis 1: Sales people are highly
motivated by short-term cash compensation
Importance of Each Factor in Motivating You to Perform
Variable Incentive Opportunity
Base Salary
Quota Size
Percent of Respondents
Future Career Advancement
Health Benefits
Company Culture
Paid Time Off
Retirement Benefits
Company Strength
Equity/Stock Grants
Value of Sales Leads Provided
Sales Training Provided
Recognition Trip
Company Car
0%
10%
Not a Consideration
11
20%
30%
40%
50%
Not Important, but Considered
60%
70%
Important
80%
90% 100%
Critical
2009 Total Rewards Conference & Exhibition
Evaluating Base, Variable and Quota
(total population)
# of Respondents
Choosing As
Package Description
% of
Respondents
Choosing As
Package
Base
Variable
Quota
n
Top
Bottom
Top
Bottom
Rank
A
$50,000
$50,000
$1.1 M
957
29
63
3%
7%
2.9
B
$40,000
$60,000
$1.2 M
954
6
618
1%
65%
4.2
C
$40,000
$60,000
$1.0 M
950
63
93
7%
10%
3.3
D
$60,000
$40,000
$1.2 M
952
78
117
8%
12%
2.6
E
$60,000
$40,000
$1.0 M
962
467
22
49%
2%
1.7
F
$50,000
$60,000
$1.2 M
957
320
38
33%
4%
2.0
12
2009 Total Rewards Conference & Exhibition
Evaluating Base, Variable and Quota
(total population)
# of Respondents
Choosing As
Package Description
% of
Respondents
Choosing As
Package
Base
Variable
Quota
n
Top
Bottom
Top
Bottom
Rank
A
$50,000
$50,000
$1.1 M
957
29
63
3%
7%
2.9
B
$40,000
$60,000
$1.2 M
954
6
618
1%
65%
4.2
C
$40,000
$60,000
$1.0 M
950
63
93
7%
10%
3.3
D
$60,000
$40,000
$1.2 M
952
78
117
8%
12%
2.6
E
$60,000
$40,000
$1.0 M
962
467
22
49%
2%
1.7
F
$50,000
$60,000
$1.2 M
957
320
38
33%
4%
2.0
13
2009 Total Rewards Conference & Exhibition
Evaluating Base, Variable and Quota
(total population)
# of Respondents
Choosing As
Package Description
% of
Respondents
Choosing As
Package
Base
Variable
Quota
n
Top
Bottom
Top
Bottom
Rank
A
$50,000
$50,000
$1.1 M
957
29
63
3%
7%
2.9
B
$40,000
$60,000
$1.2 M
954
6
618
1%
65%
4.2
C
$40,000
$60,000
$1.0 M
950
63
93
7%
10%
3.3
D
$60,000
$40,000
$1.2 M
952
78
117
8%
12%
2.6
E
$60,000
$40,000
$1.0 M
962
467
22
49%
2%
1.7
F
$50,000
$60,000
$1.2 M
957
320
38
33%
4%
2.0
14
2009 Total Rewards Conference & Exhibition
Evaluating Base, Variable and Quota
(total population)
# of Respondents
Choosing As
Package Description
% of
Respondents
Choosing As
Package
Base
Variable
Quota
n
Top
Bottom
Top
Bottom
Rank
A
$50,000
$50,000
$1.1 M
957
29
63
3%
7%
2.9
B
$40,000
$60,000
$1.2 M
954
6
618
1%
65%
4.2
C
$40,000
$60,000
$1.0 M
950
63
93
7%
10%
3.3
D
$60,000
$40,000
$1.2 M
952
78
117
8%
12%
2.6
E
$60,000
$40,000
$1.0 M
962
467
22
49%
2%
1.7
F
$50,000
$60,000
$1.2 M
957
320
38
33%
4%
2.0
15
2009 Total Rewards Conference & Exhibition
Evaluating Base, Variable and Quota
(total population)
# of Respondents
Choosing As
Package Description
% of
Respondents
Choosing As
Package
Base
Variable
Quota
n
Top
Bottom
Top
Bottom
Rank
A
$50,000
$50,000
$1.1 M
957
29
63
3%
7%
2.9
B
$40,000
$60,000
$1.2 M
954
6
618
1%
65%
4.2
C
$40,000
$60,000
$1.0 M
950
63
93
7%
10%
3.3
D
$60,000
$40,000
$1.2 M
952
78
117
8%
12%
2.6
E
$60,000
$40,000
$1.0 M
962
467
22
49%
2%
1.7
F
$50,000
$60,000
$1.2 M
957
320
38
33%
4%
2.0
16
2009 Total Rewards Conference & Exhibition
Evaluating Base, Variable and Quota
(total population)
# of Respondents
Choosing As
Package Description
% of
Respondents
Choosing As
Package
Base
Variable
Quota
n
Top
Bottom
Top
Bottom
Rank
A
$50,000
$50,000
$1.1 M
957
29
63
3%
7%
2.9
B
$40,000
$60,000
$1.2 M
954
6
618
1%
65%
4.2
C
$40,000
$60,000
$1.0 M
950
63
93
7%
10%
3.3
D
$60,000
$40,000
$1.2 M
952
78
117
8%
12%
2.6
E
$60,000
$40,000
$1.0 M
962
467
22
49%
2%
1.7
F
$50,000
$60,000
$1.2 M
957
320
38
33%
4%
2.0
17
2009 Total Rewards Conference & Exhibition
Evaluating Base, Variable and Quota
(total population)
# of Respondents
Choosing As
Package Description
% of
Respondents
Choosing As
Package
Base
Variable
Quota
n
Top
Bottom
Top
Bottom
Rank
A
$50,000
$50,000
$1.1 M
957
29
63
3%
7%
2.9
B
$40,000
$60,000
$1.2 M
954
6
618
1%
65%
4.2
C
$40,000
$60,000
$1.0 M
950
63
93
7%
10%
3.3
D
$60,000
$40,000
$1.2 M
952
78
117
8%
12%
2.6
E
$60,000
$40,000
$1.0 M
962
467
22
49%
2%
1.7
F
$50,000
$60,000
$1.2 M
957
320
38
33%
4%
2.0
18
2009 Total Rewards Conference & Exhibition
Evaluating Quota, Mix and Acceleration
(total population)
# of Respondents
Choosing As
Package Description
% of
Respondents
Choosing As
Package
Quota
Pay Mix
Above
Quota
Acceleration
A
$1.1 M
50/50
2x
929
13
87
1%
9%
3.3
B
$1.2 M
40/60
2x
925
3
612
0%
66%
4.1
C
$1.0 M
40/60
3x
928
215
45
23%
5%
2.6
D
$1.2 M
60/40
3x
936
448
21
48%
2%
1.6
E
$1.0 M
60/40
2x
929
155
125
17%
13%
2.5
F
$1.2 M
50/50
3x
934
102
37
11%
4%
2.1
19
n
Top
Bottom
Top
Bottom
Average
Rank
2009 Total Rewards Conference & Exhibition
Evaluating Quota, Mix and Acceleration
(total population)
# of Respondents
Choosing As
Package Description
% of
Respondents
Choosing As
Package
Quota
Pay Mix
Above
Quota
Acceleration
A
$1.1 M
50/50
2x
929
13
87
1%
9%
3.3
B
$1.2 M
40/60
2x
925
3
612
0%
66%
4.1
C
$1.0 M
40/60
3x
928
215
45
23%
5%
2.6
D
$1.2 M
60/40
3x
936
448
21
48%
2%
1.6
E
$1.0 M
60/40
2x
929
155
125
17%
13%
2.5
F
$1.2 M
50/50
3x
934
102
37
11%
4%
2.1
20
n
Top
Bottom
Top
Bottom
Average
Rank
2009 Total Rewards Conference & Exhibition
Evaluating Quota, Mix and Acceleration
(total population)
# of Respondents
Choosing As
Package Description
% of
Respondents
Choosing As
Package
Quota
Pay Mix
Above
Quota
Acceleration
A
$1.1 M
50/50
2x
929
13
87
1%
9%
3.3
B
$1.2 M
40/60
2x
925
3
612
0%
66%
4.1
C
$1.0 M
40/60
3x
928
215
45
23%
5%
2.6
D
$1.2 M
60/40
3x
936
448
21
48%
2%
1.6
E
$1.0 M
60/40
2x
929
155
125
17%
13%
2.5
F
$1.2 M
50/50
3x
934
102
37
11%
4%
2.1
21
n
Top
Bottom
Top
Bottom
Average
Rank
2009 Total Rewards Conference & Exhibition
Evaluating Quota, Mix and Acceleration
(total population)
# of Respondents
Choosing As
Package Description
% of
Respondents
Choosing As
Package
Quota
Pay Mix
Above
Quota
Acceleration
A
$1.1 M
50/50
2x
929
13
87
1%
9%
3.3
B
$1.2 M
40/60
2x
925
3
612
0%
66%
4.1
C
$1.0 M
40/60
3x
928
215
45
23%
5%
2.6
D
$1.2 M
60/40
3x
936
448
21
48%
2%
1.6
E
$1.0 M
60/40
2x
929
155
125
17%
13%
2.5
F
$1.2 M
50/50
3x
934
102
37
11%
4%
2.1
22
n
Top
Bottom
Top
Bottom
Average
Rank
2009 Total Rewards Conference & Exhibition
Evaluating Quota, Mix and Acceleration
(total population)
# of Respondents
Choosing As
Package Description
% of
Respondents
Choosing As
Package
Quota
Pay Mix
Above
Quota
Acceleration
A
$1.1 M
50/50
2x
929
13
87
1%
9%
3.3
B
$1.2 M
40/60
2x
925
3
612
0%
66%
4.1
C
$1.0 M
40/60
3x
928
215
45
23%
5%
2.6
D
$1.2 M
60/40
3x
936
448
21
48%
2%
1.6
E
$1.0 M
60/40
2x
929
155
125
17%
13%
2.5
F
$1.2 M
50/50
3x
934
102
37
11%
4%
2.1
23
n
Top
Bottom
Top
Bottom
Average
Rank
2009 Total Rewards Conference & Exhibition
Evaluating Quota, Mix and Acceleration
(total population)
# of Respondents
Choosing As
Package Description
% of
Respondents
Choosing As
Package
Quota
Pay Mix
Above
Quota
Acceleration
A
$1.1 M
50/50
2x
929
13
87
1%
9%
3.3
B
$1.2 M
40/60
2x
925
3
612
0%
66%
4.1
C
$1.0 M
40/60
3x
928
215
45
23%
5%
2.6
D
$1.2 M
60/40
3x
936
448
21
48%
2%
1.6
E
$1.0 M
60/40
2x
929
155
125
17%
13%
2.5
F
$1.2 M
50/50
3x
934
102
37
11%
4%
2.1
24
n
Top
Bottom
Top
Bottom
Average
Rank
2009 Total Rewards Conference & Exhibition
Evaluating Quota, Mix and Acceleration
(total population)
# of Respondents
Choosing As
Package Description
% of
Respondents
Choosing As
Package
Quota
Pay Mix
Above
Quota
Acceleration
A
$1.1 M
50/50
2x
929
13
87
1%
9%
3.3
B
$1.2 M
40/60
2x
925
3
612
0%
66%
4.1
C
$1.0 M
40/60
3x
928
215
45
23%
5%
2.6
D
$1.2 M
60/40
3x
936
448
21
48%
2%
1.6
E
$1.0 M
60/40
2x
929
155
125
17%
13%
2.5
F
$1.2 M
50/50
3x
934
102
37
11%
4%
2.1
25
n
Top
Bottom
Top
Bottom
Average
Rank
2009 Total Rewards Conference & Exhibition
Evaluating Quota, Mix and Leadflow
(total population)
# of Respondents
Choosing As
Package Description
% of
Respondents
Choosing As
Package
Quota
Pay Mix
Qualified
Leads
A
$1.1 M
60/40
500
884
357
68
40%
8%
1.8
B
$1.2 M
60/40
600
885
227
97
26%
11%
2.0
C
$1.0 M
40/60
500
882
102
214
12%
24%
3.2
D
$1.2 M
40/60
600
882
54
358
6%
41%
3.4
E
$1.0 M
50/50
600
888
129
21
15%
2%
2.1
F
$1.2 M
50/50
500
885
22
124
2%
14%
3.0
26
n
Top
Bottom
Top
Bottom
Average
Rank*
2009 Total Rewards Conference & Exhibition
Evaluating Quota, Mix and Leadflow
(total population)
# of Respondents
Choosing As
Package Description
% of
Respondents
Choosing As
Package
Quota
Pay Mix
Qualified
Leads
A
$1.1 M
60/40
500
884
357
68
40%
8%
1.8
B
$1.2 M
60/40
600
885
227
97
26%
11%
2.0
C
$1.0 M
40/60
500
882
102
214
12%
24%
3.2
D
$1.2 M
40/60
600
882
54
358
6%
41%
3.4
E
$1.0 M
50/50
600
888
129
21
15%
2%
2.1
F
$1.2 M
50/50
500
885
22
124
2%
14%
3.0
27
n
Top
Bottom
Top
Bottom
Average
Rank*
2009 Total Rewards Conference & Exhibition
Evaluating Quota, Mix and Leadflow
(total population)
# of Respondents
Choosing As
Package Description
% of
Respondents
Choosing As
Package
Quota
Pay Mix
Qualified
Leads
A
$1.1 M
60/40
500
884
357
68
40%
8%
1.8
B
$1.2 M
60/40
600
885
227
97
26%
11%
2.0
C
$1.0 M
40/60
500
882
102
214
12%
24%
3.2
D
$1.2 M
40/60
600
882
54
358
6%
41%
3.4
E
$1.0 M
50/50
600
888
129
21
15%
2%
2.1
F
$1.2 M
50/50
500
885
22
124
2%
14%
3.0
28
n
Top
Bottom
Top
Bottom
Average
Rank*
2009 Total Rewards Conference & Exhibition
Evaluating Quota, Mix and Leadflow
(total population)
# of Respondents
Choosing As
Package Description
% of
Respondents
Choosing As
Package
Quota
Pay Mix
Qualified
Leads
A
$1.1 M
60/40
500
884
357
68
40%
8%
1.8
B
$1.2 M
60/40
600
885
227
97
26%
11%
2.0
C
$1.0 M
40/60
500
882
102
214
12%
24%
3.2
D
$1.2 M
40/60
600
882
54
358
6%
41%
3.4
E
$1.0 M
50/50
600
888
129
21
15%
2%
2.1
F
$1.2 M
50/50
500
885
22
124
2%
14%
3.0
29
n
Top
Bottom
Top
Bottom
Average
Rank*
2009 Total Rewards Conference & Exhibition
Evaluating Quota, Mix and Leadflow
(total population)
# of Respondents
Choosing As
Package Description
% of
Respondents
Choosing As
Package
Quota
Pay Mix
Qualified
Leads
A
$1.1 M
60/40
500
884
357
68
40%
8%
1.8
B
$1.2 M
60/40
600
885
227
97
26%
11%
2.0
C
$1.0 M
40/60
500
882
102
214
12%
24%
3.2
D
$1.2 M
40/60
600
882
54
358
6%
41%
3.4
E
$1.0 M
50/50
600
888
129
21
15%
2%
2.1
F
$1.2 M
50/50
500
885
22
124
2%
14%
3.0
30
n
Top
Bottom
Top
Bottom
Average
Rank*
2009 Total Rewards Conference & Exhibition
Evaluating Quota, Mix and Leadflow
(total population)
# of Respondents
Choosing As
Package Description
% of
Respondents
Choosing As
Package
Quota
Pay Mix
Qualified
Leads
A
$1.1 M
60/40
500
884
357
68
40%
8%
1.8
B
$1.2 M
60/40
600
885
227
97
26%
11%
2.0
C
$1.0 M
40/60
500
882
102
214
12%
24%
3.2
D
$1.2 M
40/60
600
882
54
358
6%
41%
3.4
E
$1.0 M
50/50
600
888
129
21
15%
2%
2.1
F
$1.2 M
50/50
500
885
22
124
2%
14%
3.0
31
n
Top
Bottom
Top
Bottom
Average
Rank*
2009 Total Rewards Conference & Exhibition
Evaluating Quota, Mix and Leadflow
(total population)
# of Respondents
Choosing As
Package Description
% of
Respondents
Choosing As
Package
Quota
Pay Mix
Qualified
Leads
A
$1.1 M
60/40
500
884
357
68
40%
8%
1.8
B
$1.2 M
60/40
600
885
227
97
26%
11%
2.0
C
$1.0 M
40/60
500
882
102
214
12%
24%
3.2
D
$1.2 M
40/60
600
882
54
358
6%
41%
3.4
E
$1.0 M
50/50
600
888
129
21
15%
2%
2.1
F
$1.2 M
50/50
500
885
22
124
2%
14%
3.0
32
n
Top
Bottom
Top
Bottom
Average
Rank*
2009 Total Rewards Conference & Exhibition
Each package has a different payout – rep
confidence is critical to assessing value
Six Packages - Payout
$200,000.00
$180,000.00
$160,000.00
A
B
C
D
E
F
Payout
$140,000.00
$120,000.00
$100,000.00
$80,000.00
$60,000.00
$40,000.00
$20,000.00
$0.00
1000 1200 1400 1600 1800 2000 2200 2400 2600 2800 3000
Avg. Lead Value
33
2009 Total Rewards Conference & Exhibition
Hypothesis 2: Senior sales reps are driven
by different elements than junior reps
Importance of Each Factor in Deciding Whether to
Stay in Role or Take Another
(<10 Years in Sales)
Variable Incentive Opportunity
Base Salary
Health Benefits
Percent of Respondents
Future Career Advancement
Retirement Benefits
Company Strength
Company Culture
Paid Time Off
Quota Size
Sales Training Provided
Value of Sales Leads Provided
Equity/Stock Grants
Recognition Trip
Company Car
0%
10%
Not a Consideration
34
20%
30%
40%
50%
Not Important, but Considered
60%
70%
Important
80%
90% 100%
Critical
2009 Total Rewards Conference & Exhibition
Hypothesis 2: Senior sales reps are driven
by different elements than junior reps
Importance of Each Factor in Motivating You to Perform
(<10 Years in Sales)
Variable Incentive Opportunity
Base Salary
Quota Size
Percent of Respondents
Future Career Advancement
Health Benefits
Company Culture
Paid Time Off
Retirement Benefits
Company Strength
Equity/Stock Grants
Value of Sales Leads Provided
Sales Training Provided
Recognition Trip
Company Car
0%
10%
Not a Consideration
35
20%
30%
40%
50%
Not Important, but Considered
60%
70%
Important
80%
90% 100%
Critical
2009 Total Rewards Conference & Exhibition
Hypothesis 2: Senior sales reps are driven
by different elements than junior reps
Importance of Each Factor in Deciding Whether to
Stay in Role or Take Another
(>10 Years in Sales)
X
Variable Incentive Opportunity
Base Salary
Health Benefits
Percent of Respondents
Future Career Advancement
Retirement Benefits
Company Strength
Company Culture
Paid Time Off
Quota Size
Sales Training Provided
Value of Sales Leads Provided
Equity/Stock Grants
Recognition Trip
Company Car
0%
10%
Not a Consideration
36
20%
30%
40%
50%
Not Important, but Considered
60%
70%
Important
80%
90% 100%
Critical
2009 Total Rewards Conference & Exhibition
Hypothesis 2: Senior sales reps are driven
by different elements than junior reps
Importance of Each Factor in Motivating You to Perform
(>10 Years in Sales)
?
Variable Incentive Opportunity
Base Salary
Quota Size
Percent of Respondents
Future Career Advancement
Health Benefits
Company Culture
Paid Time Off
Retirement Benefits
Company Strength
Equity/Stock Grants
Value of Sales Leads Provided
Sales Training Provided
Recognition Trip
Company Car
0%
10%
Not a Consideration
37
20%
30%
40%
50%
Not Important, but Considered
60%
70%
Important
80%
90% 100%
Critical
2009 Total Rewards Conference & Exhibition
Over time, base salary becomes less
important as sales people select a package
First Packages - Drivers by Sales Tenure
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Base Salary
Quota
TTC
Less
than
2yrs
38
X
2-5yrs
510yrs
1015yrs
1520yrs
2025yrs
Over
25yrs
2009 Total Rewards Conference & Exhibition
Over time, upside acceleration becomes
more important to senior sales people
Second Packages - Drivers by Sales Tenure
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Base Salary
Quota
Accelerator
Less
than
2yrs
39
X
2-5yrs 5-10yrs
1015yrs
1520yrs
2025yrs
Over
25yrs
2009 Total Rewards Conference & Exhibition
Over time, leadflow becomes moderately
more important to senior sales people
Third Packages - Drivers by Sales Tenure
X
100%
90%
80%
70%
60%
Base Salary
50%
Quota
40%
Leadflow
30%
20%
10%
0%
Less
than
2yrs
40
2-5yrs 5-10yrs
1015yrs
1520yrs
2025yrs
Over
25yrs
2009 Total Rewards Conference & Exhibition
Top performers’ selection criteria mirrored
the overall populations’ priorities
Importance of Each Factor in Deciding Whether to
Stay in Role or Take Another
(Top 10% Performers)
X
Variable Incentive Opportunity
Base Salary
Health Benefits
Percent of Respondents
Future Career Advancement
Retirement Benefits
Company Strength
Company Culture
Paid Time Off
Quota Size
Sales Training Provided
Value of Sales Leads Provided
Equity/Stock Grants
Recognition Trip
Company Car
0%
10%
Not a Consideration
41
20%
30%
40%
50%
Not Important, but Considered
60%
70%
Important
80%
90% 100%
Critical
2009 Total Rewards Conference & Exhibition
Top performers also showed a distinct
reliance on variable pay for motivation
Importance of Each Factor in Motivating You to Perform
(Top 10% Performers)
X
Variable Incentive Opportunity
Base Salary
Quota Size
Percent of Respondents
Future Career Advancement
Health Benefits
Company Culture
Paid Time Off
Retirement Benefits
Company Strength
Equity/Stock Grants
Value of Sales Leads Provided
Sales Training Provided
Recognition Trip
Company Car
0%
10%
Not a Consideration
42
20%
30%
40%
50%
Not Important, but Considered
60%
70%
Important
80%
90% 100%
Critical
2009 Total Rewards Conference & Exhibition
Highly engaged sales people tend to credit
the strength of the company with their status
Importance of Each Factor in Deciding Whether to
Stay in Role or Take Another
(Highly Engaged)
Variable Incentive Opportunity
Base Salary
Health Benefits
Percent of Respondents
Future Career Advancement
Retirement Benefits
Company Strength
Company Culture
Paid Time Off
Quota Size
Sales Training Provided
Value of Sales Leads Provided
Equity/Stock Grants
Recognition Trip
Company Car
0%
10%
Not a Consideration
43
20%
30%
40%
50%
Not Important, but Considered
60%
70%
Important
80%
90% 100%
Critical
2009 Total Rewards Conference & Exhibition
Highly engaged sales people are still
motivated by variable pay, but career rises
Importance of Each Factor in Motivating You to Perform
(Highly Engaged)
X
Variable Incentive Opportunity
Base Salary
Quota Size
Percent of Respondents
Future Career Advancement
Health Benefits
Company Culture
Paid Time Off
Retirement Benefits
Company Strength
Equity/Stock Grants
Value of Sales Leads Provided
Sales Training Provided
Recognition Trip
Company Car
0%
10%
Not a Consideration
44
20%
30%
40%
50%
Not Important, but Considered
60%
70%
Important
80%
90% 100%
Critical
2009 Total Rewards Conference & Exhibition
What did sales people have to say?
“All the above
compensation plans are
only relevant if quotas are
set accurately. Without
realistic quotas there will be
a major lack of motivation.”
“Having a base salary that
you can exist on is critical.
If I don't have to stress
about making enough to
support my family - I work
much harder to over
achieve on the incentive
part of my compensation.”
45
“Six years ago I would have
chosen the higher risk, lower base
pay and higher incentive plan
because business was good and it
was easier to hit my quota.”
“Accelerators are no
benefit if targets are set
so high that that they are
unattainable.”
2009 Total Rewards Conference & Exhibition
What did sales people have to say?
“Effective sales people always
set their sight beyond the 100%
achievement. Incentives after
quota is what makes the game
interesting and keeps me
motivated.”
“Preference is going to be for a
higher at risk when combined with
higher multipliers. If the risk and
multiplier is reduced, then the
quota should be reduced as effort
and risk is no longer proportional.”
46
“Sales leads mean nothing in this
job… we create our own and do
not need Marketing to do it for us,
as they are usually off base and its
a waste of money and time.”
“Due to the global economic
environment it'd work better
to have either an aggressive
plan with small quotas or a
conservative plan with high
quotas.”
2009 Total Rewards Conference & Exhibition
What did sales people have to say?
“I'd like a careful balance of being able to make
a lot of money when I hit big, but not having to
survive on Ramen noodles when I don't.”
“Base salary is used by the banks
to determine my ability to secure a
loan, so it has disproportionate
importance relative to other types
of incentive… plus the taxes in my
country penalize bonuses.”
47
“Just as important as some
of these factors is the
amount of authority the
sales person has at the local
level… flexibility is critical
to execution.”
2009 Total Rewards Conference & Exhibition
What can we conclude?
„
Hypothesis #1 – (Confirmed) – Variable incentive opportunity,
followed by base pay dominated the attractors and motivators
for almost all segments. Career advancement showed better
than expected, especially with junior or Asian sales people.
Company strength affected job selection and engagement.
„
Hypothesis #2 – (Mixed) – Base salary shows a marked
decline in importance over a sales person’s career. TTC and
accelerators show a marked increase in importance over time.
Quotas and leadflow remain a tertiary consideration.
„
Hypothesis #3 – (Rejected) – Top performing and highly
engaged sales people still care most about compensation,
except in parts of Asia and Europe where career
advancement and company strength matter most
48
2009 Total Rewards Conference & Exhibition
Other interesting observations:
„
While variable pay is stated as the top priority by almost all
groups, most sales people currently choose base salary over
other factors when presented with packages
„
Recognition and car allowances, often touted in sales
organizations, may be prime opportunities for cost savings
„
Women tended to have a more balanced perspective,
assessing a company’s culture, strength and benefits more
than men
„
Half of all people surveyed viewed themselves as 90th
percentile performers… companies should harness that
optimism in this economy
49
2009 Total Rewards Conference & Exhibition
Additional Information
„
Stop by our booth if you’d like more information
‹
Elements of the Employee Value Proposition for Sales
‹
Sales Compensation Design
‹
Sales Force Effectiveness
„
Hewitt’s Booth #909
„
E-mail: [email protected]
„
Mobile: 404.276.7876
50
2009 Total Rewards Conference & Exhibition
Appendix
51
2009 Total Rewards Conference & Exhibition
Composition of the Sample
Participants by Gender
Female
26%
Male
74%
n=940
Under 30
16%
Over 60
1%
40 - 49
29%
52
Yes
30%
No
70%
n=937
Participants by Performance Level
Participants by Age
50 - 59
7%
Percent of Participants Who are
Engaged in Their Work
75%ile
35%
30 - 39
47%
n=947
50%ile
13% 25%ile 10%ile
2%
1%
90%ile
49%
n=950
2009 Total Rewards Conference & Exhibition
Composition of the Sample
Participants by
Salary as Percent of Total Income
Participants by
Sales Experience
Number of Respondents
200
150
100
50
90
%
10
0%
80
%
70
%
60
%
50
%
40
%
30
%
20
%
10
%
0
0%
Number of Respondents
250
Fixed Salary as % of Total Income
53
n=942
300
250
200
150
100
50
0
Less
than
2yrs
2-5yrs
510yrs
1015yrs
1520yrs
2025yrs
Years in a Sales Role
2009 Total Rewards Conference & Exhibition
Over
25yrs
n=949
Professional Biography — Scott Sands
Scott Sands is a Principal and Sales Force Effectiveness Practice Leader located in Atlanta,
Georgia. He works with senior executives in large, global companies to identify opportunities for
revenue growth, select the proper sales channels, refine selling processes and messages for
specific market segments, staff organizations with the right type and number of sales professionals,
set fair but challenging goals, and design motivational incentives. He has 18 years of experience in
industry and with leading professional service firms, including Briggs & Sands Consulting, Sibson
Consulting, The Alexander Group, and Watson Wyatt. His recent client work includes: Fortune 1000
telecommunications, technology, pharmaceutical, insurance, banking, energy, and heavy
manufacturing companies including: Adobe, Assurant, AT&T, Avaya, British Petroleum, Broadcom,
Cisco, Cox Communications, CSC, Dell, Electrolux, EMC, General Electric, Intelsat, Johnson &
Johnson, Merial, MetLife, National Semiconductor, Nortel, Northrop Grumman, Qwest, Roche,
SonyEricsson, Sprint, Symantec, Travelers, Unisource, Verizon, VeriSign, and WellCare.
Scott is a frequent author and speaker at national conferences. His work has appeared in
Workspan, Selling Power, SAMA's Velocity, and Sales & Marketing Executive Review. In 2006, he
co-authored the WorldatWork's bestselling book Sales Compensation Essentials. Scott holds a
bachelor's degree in Electrical Engineering and Mathematics from Vanderbilt University and a MBA
with a focus in Marketing and Organization Effectiveness from The University of Texas.
Scott oversees all dedicated Sales Force Effectiveness consulting resources in North America. He
coordinates with global Hewitt Talent and Organization Consulting resources to ensure that this
fast-growing segment delivers proven approaches, cutting-edge insight, and client business impact.
54
2009 Total Rewards Conference & Exhibition