Each month we post highlights from the speakers at NJ Compensation Association monthly meetings. Here’s our take from the February 23, 2017 meeting:
Topic: Alternative Approaches to New Incentive Pay Design Speaker: Shannon DeHart, Principal, Korn Ferry Hay Group
Shannon presented two case studies. The first study offered an example of an organization trying to motivate sales people in a declining industry, while the second referenced a company that re-designed their sales incentive programs to promote continued growth for the organization.
The first case study featured a print newspaper publication. In 2016, there was an 8.7% decline in advertising spend within the print news industry. With the migration to online publications, the newspaper struggled with the question: “How do we engage and drive performance in a declining industry?” They faced this challenge and worked proactively to understand how to pay their sales organization to keep them motivated. Korn Ferry Hay Group helped them design a plan that would restructure and move them toward a solution selling model that kept quarterly objectives, while introducing annual focus and incentives.
The second case study highlighted a specialty pharmaceutical firm. This firm was losing money in a growing industry. Even through sales representatives were being well compensated by selling high volume, low margin therapy pharmaceuticals, the company was not realizing profits. They needed a plan that would bring about sustained growth for the organization as a whole. A territory-planning expert was engaged. Focusing on patient needs and product offerings, Korn Ferry Hay Group analyzed physician outreach by territory, and they helped devise an improved sales compensation model that utilized a balanced score card for quarterly goals and acceleration incentives for annual goals.
At the end of the presentation the audience was introduced to three tools offered by Korn Ferry Hay Group to help with Incentive Pay Design: “The Early Warning Checklist,” “The Sales Effectiveness Diagnostic Checklist” and “The Sales Compensation and Incentive Stoplight Gap Analysis.”