The dramatic changes in the economic environment require a new understanding of employees, their tasks, and their roles. Employees should act independently and responsibly, making decisions locally in the interests of the company. A high degree of flexibility is desired, as is a focus on corporate goals.
How should traditional variable compensation systems in sales be assessed in this light?
- They're boring because more variable income is allocated to the employee's base performance than to their target performance. Overperformance isn't really worth it.
- They focus one-sidedly on one performance criterion (e.g. sales or contribution margin) and neglect other essential aspects (costs, strategic goals, product and customer goals, etc.).
- Variable Income shares are often too low and therefore have too little effect on the behavior of employees or they are too high and therefore inadmissible from an employment law perspective.
- Conventional variable compensation is often unfair because the level of employee income usually depends more on random factors (territorial potential) than on personal performance.
- Traditional performance-based compensation is usually limited to a few groups of employees and loses sight of the bigger picture.
- Conventional commission/bonus systems are inflexible because they always reward the same performance criteria and are not open to external or internal changes.
- Traditional performance-based compensation systems lack team-oriented structures. They reward only the performance of individuals, and networking is nonexistent.
Variable Remuneration that has such deficiencies has, in our experience, little impact on employee motivation and performance.
What is recommended here is a sustainable approach and the introduction of a new bonus system that avoids these mistakes.
Participants:
The workshop is aimed at entrepreneurs, managing directors, sales managers, sales and marketing managers, and managers from accounting and controlling.
To use:
Modern sales compensation is, on the one hand, a management and control tool that engages employees in achieving relevant sales goals. On the other hand, modern sales compensation is designed to be motivating and encourage top performance.
You will learn how to develop compensation systems that have the following qualities:
- They are profit-oriented and are based on the profit center of the individual employee or team.
- In addition to profits, they also compensate for other operational and strategic sales interests.
- They are goal-oriented and work with goal achievement bonuses.
- They have motivating variable income curves: additional services really pay off.
- They adapt to changing sales goals over time.
- They pay based on performance and are therefore fair.
- They create networked compensation solutions by including all sales employees (and other departments) in variable compensation.
About the speaker:
Dr. Heinz-Peter Kieser, Management Consulting Dr. Finkenrath, Dr. Kieser + Partner, Walldürn-Hornbach
Dr. Heinz-Peter Kieser spent 17 years as a sales and marketing manager in medium-sized companies and is now the owner of the compensation consultancy Dr. Finkenrath, Dr. Kieser + Partner, founded in 1970. Dr. Kieser's consulting work focuses on the development of performance-based compensation concepts for companies in a wide variety of industries. Over 800 companies have been converted by the consulting firm.
Here you can find more information about the event.
