I recently came across a 3 page article about Accenture's view and approach to incentive compensation management, and I thought it might be interesting to others.
The paper first gives a quick run-down of what effective incentive compensation can do. The main points are:
• Give companies the fl exibility to respond to rapidly changing
market demands and to quickly implement new sales
strategies and plans.
• Enhance the productivity of the sales force productivity
by increasing their confi dence in the incentive program.
• Support the most effective selling behaviors with leadingedge
technologies and tools.
They claim that their research suggests that a $1 billion business unit could boost their pre-tax profit by $13 million by using better motivational tools and incentives to increase performance of its sales people. That sounds impressive, but that's really only a 1.3% return - not bad, but very conservative compared to other estimates.
What I like most about the article is its framework to implementing an incentive compensation plan. However, this "framework" is not discussed at all, it is just a picture used as a space filler. The illustrated steps are:
- Sales Force Design and Objectives Setting
- Compensation Plan Design
- Compensation Process Re-engineering
- Compensation Organization Model Design
- Compensation Plan and Hierarchies Setup
- Compensation System Design, Build and Run
- Enterprise Data and Systems Integration
- Business Change Management
I'm not sure I understand how Data and Systems Integration can come before the "Run" phase, but it's a pretty graphic and it gives a good holistic view of building an incentive management system.
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