(847) 236-1208

An auto products distribution company with 200 employees worldwide

The Situation

The company had experienced difficulty achieving growth goals in two of its divisions. The sales employees in the divisions had been on company-wide management bonus plans and/or profit sharing plans that were much beyond their line of sight. The company felt that the lack of sales incentives was inhibiting growth in these divisions. They felt that without sales incentives, they were not paying the appropriate compensation levels for its sales positions vis-á-vis the external competitive market, and that they were not motivating the sales force to achieve the growth targets. BCR was engaged to make total target cash compensation and plan design recommendations to motivate the right behaviors to achieve aggressive sales growth goals through new business and the organic growth of existing business.

The Deliverables

  • Assessed the strengths and limitations of the sales compensation program based on the inventory and analysis of the current program, as well as the feedback from the interviews and external benchmark data. Assessment not only included a compensation review but also a review of sales effectiveness in areas such as goal-setting, role definition, and sales tools.
  • Provided current trends and best practices in sales compensation program design. Developed model of key success determinants for the sales incentive plan design and communications, and performed a gap analysis between current and desired programs.
  • Prepared recommendations to introduce a sales incentive plan: type of plan design; incentive targets; degree of leverage; mix; performance measures and range of award opportunities; weighting of sales performance components; payout formulas and mechanics; timing of payouts; etc. A cost/sensitivity analysis was also provided to illustrate plan cost at various levels of performance.
  • Prepared an implementation and communications program approach and communication materials to announce changes to the sales team. This included development of the plan document and individual incentive plan statements which could be used to calculate incentives earned. BCR also assisted leadership in the communication meetings to address employee questions.

The Results Achieved

  • Sales incentive plans were implemented to pay for performance based on each sales employee’s line of sight.
  • Target sales incentives were established for each sales role based on appropriate pay mix to ensure that the sales employees’ compensation was market competitive.
  • The company used the newly developed incentive plans as a pilot to test the effectiveness of sales incentives within the company with the intention of developing appropriate sales incentive plans for all divisions.