Close
Learning Methods
Classroom
A traditional classroom couples on-site learning with the added value of face-to-face interaction with instructors and peers. With courses and exams scheduled worldwide, you will be sure to find a class near you.
Interaction
Highly Interactive
On-going interaction with instructor throughout the entire classroom event
Interaction with peers/professionals via face-to-face
Components (May Include)
Onsite
On-site instructor-led delivery of course modules, discussions, exercises, case studies, and application opportunities
Supplemental learning elements such as: audio/video files, tools and templates, articles and/or white papers
E-course materials available two weeks prior to the course start date; printed course materials ship directly to the event location
Duration
One + Days
Varies by course ranging from one to multiple days
Technical Needs
Specific requirements are clearly noted on the course page
Virtual Classroom
Ideal for those who appreciate live education instruction, but looking to save on travel. A virtual classroom affords you many of the same learning benefits as traditional–all from the convenience of your office.
Interaction
Highly Interactive
On-going interaction with instructor throughout the entire virtual classroom event
Interaction with peers/professionals via online environment
Components (May Include)
Live online instructor-led delivery of course modules, discussions, exercises, case studies, and application opportunities
Supplemental learning elements such as: audio/video files, tools and templates, articles and/or white papers
E-course materials available up to one week prior to the course start date. Recorded playback and supplemental materials available up to seven days after the live event.
Duration
Varies by course ranging from one to multiple sessions
Technical Needs
Adobe Flash Player
Acrobat Reader
Computer with sound capability and high-speed internet access
Phone line access
E-Learning
A self-paced, online learning experience that allows you to study any time of day. Course material is pre-recorded by an instructor and you have the flexibility to view content modules as desired.
Interaction
Independent Learning
Components (May Include)
Pre-Recorded
Pre-recorded course modules
Supplemental learning elements such as: audio/video files, online quizzes
E-course materials start on the day of purchase
Optional purchased print material ships within 7 business days
Duration
120 Days - Anytime
120-day access starts on the day of purchase
Direct access to all components
Technical Needs
Adobe Flash Player
Acrobat Reader
Computer with sound capability and high-speed internet access
Close
Contact Sponsor
E-Reward
Online
Paul Thompson
Phone: 1 44 01614322584
Contact by Email | Website
Close
Sorry, you can't add this item to the cart.
You have reached the maximum allowed quantity for purchase in your cart or the item isn't available anymore.
Product successfully added to your cart!
Price
View your cart
Continue shopping
Please note our website will be down this Friday, November 5 from 9pm ET – 11pm ET for routine maintenance. We apologize for any inconvenience.
WORKSPAN
WORKSPAN DAILY |

COVID-19: Should You Protect Sellers’ Pay?

Should salespeople’s pay take an incentive pay “hit” because of economic dislocation by COVID-19?

Image

The short answer is that sales leaders should determine how to “protect” the earnings of sales personnel resulting from any shortfall in sales revenue due to COVID-19. In other words, yes, sales leadership should protect sales compensation target earnings. 

Is Sales Compensation a Variable Cost? 
The immediate logic is to assume that sales compensation costs are variable. With this assumption, sales leaders would not adjust quotas or provide earnings guarantees. However, sales compensation costs are not variable to the company. Yes, they are variable to the person, but not to the company. For producers (real estate, traders, brokers, manufacturer reps, independent financial advisors, etc.), payouts are fully variable. However, sales compensation costs for sales representatives, who have target pay and a sales quota, are not variable to the company. Why?

Sales representatives are “purchased labor.” Sales leaders assign a target pay amount split into two components: base pay and target incentive. Sales representatives perform against a goal to achieve target earnings. Some will exceed the goal and earn above-target earnings, some will not. In balance, the average payouts should equal the summation of target earnings. The summation of target earnings is the “budget” for the sales representative population. Meanwhile, producers get a percent of the business — some/all will earn plenty; some/all might earn very little. The cost to the company is fully variable.

Now What?
The objective is to keep sales personnel “whole” or “partially whole” so they do not suffer from a financial short fall caused by factors outside of their control. How?

Sales management has many tools available to protect target earnings. But, select a method carefully. Unintended consequences can arise if management selects the wrong method.

Avoid techniques that encourage sellers to take a “sellers’ holiday.” Immediately offering a guarantee or quota adjustment to assuage sellers’ fears might cause some sellers to throttle sales efforts, and even delay pending deals.

It’s best to acknowledge the market conditions. “We understand the sales challenges you are facing. We want to ensure earnings opportunities during this uncertain economic period. Keep up your selling efforts; find ways to meet customer needs. Secure orders. Over the next several selling periods, we will review our selling results to determine if it warrants any pay or quota modifications.”

Earnings Protection Choices
Consider one or two of these suggestions to protect sellers’ earnings:

  • Guarantee: A simple solution is to provide all sellers a guaranteed minimum payout level (e.g., 80%) even if the seller’s performance does not exceed the guarantee amount. 
  • Reduce Quota: Some companies may want to make firm-wide quota reductions to all sellers based on revised business plan expectations (if able to set one).
  • Bridge Performance: Companies with annual quotas can apply bridge performance expectations for a period to calculate overall quota achievement. Bridge performance can be set at 100%, lower (e.g., 80%), or based on the seller’s current run-rate (e.g., 95% for Seller A and 105% for Seller B).
  • Index Performance: Another method is to shift the median performer to 100%, but keep the performance distribution standard deviation the same (similar to stack ranking).
  • Team Rewards: Some companies may choose team measures to communicate collective circumstances that “we are all in this together” and acknowledge account/vertical/geographical unpredictability.
  • Provide SPIFs and Contests: Companies can reallocate sales compensation cost savings to fund SPIFs and contests that reward sellers for desired near-term behaviors, such as funnel development activities, competitive wins, market share growth, adoption and/or customer satisfaction activities. 
  • Terminate Plan: If market dislocation is severe, uneven and disparate, leaders can terminate the existing plan and calculate final payouts based on year-to-date performance. New plan options include developing a new sales compensation plan and quota, paying 100% of target incentive, or possibly moving all sellers to a corporate plan.

What about dire conditions? When a company’s performance suffers threatening sales erosion, sales personnel will participate in a like manner with all employees regarding pay reductions, layoffs and terminations.

Hopefully, COVID-19 has only a temporary impact on your company’s fortunes. You will need a robust and positive sales team when economic opportunities flourish again. Protect your sellers’ target incentive.

About the Author

David Cichelli Bio Image

David Cichelli is a revenue growth advisor for the Alexander Group. Connect with him on LinkedIn.


About WorldatWork

WorldatWork is a professional nonprofit association that sets the agenda and standard of excellence in the field of Total Rewards. Our membership, signature certifications, data, content, and conferences are designed to advance our members’ leadership, and to help them influence great outcomes for their own organizations.

About Membership

Membership provides access to practical resources, research, emerging trends, a professional network, and career-building education and certification. Learn more and join today.