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Key Ingredient for 2021 Sales Compensation Plan Design

by Dave Egloff  |  September 14, 2020  |  Comments Off on Key Ingredient for 2021 Sales Compensation Plan Design

It’s that time of year where we start thinking about the 2021 sales compensation plan design.  Most of us recognize that – in normal circumstances – sales compensation can be challenging.  Unfortunately, this year is unlike any other given the amount of lingering uncertainty.

While it’s true that each organization has its own set of challenges and obstacles, there is something that will help all companies this year.  Time.

Most organizations change compensation plans each January – this leaves about 3 ½ months to move through a lot of work to get their plans distributed.  While savvy practitioners have already started their process, many have yet to kick things off.  Remember, the clock is ticking – working days are passing quickly.  It won’t be long before the reality of less and less time remaining sets in.

Why is time so important this year?

Time is always an asset.  As Mark Cuban has said:

“Time is the most valuable asset you don’t own.  You may or may not realize it yet, but how you use or don’t use your time is going to be the best indication of where your future is going to take you.”

I’m confident that Mr. Cuban wasn’t thinking about sales compensation when he uttered these words, but they certainly apply.  The compensation plan design process is going to take more time this year for a variety of reasons.  First, I suspect many will take longer to communicate and collaborate, especially if this is their first time working in a broadly distributed team setting. Remote work is great but it may require some adjustments and cause some delays.

Additionally, I suspect that there will be more stakeholders and steps in the sales compensation plan design process.  Stakeholders will require more time and attention as they all come with their own sets of wants and needs.

  • Sales leaders want to ensure that sales strategy, role priorities and compensation plans all align.
  • Finance will have a keen eye on scenario planning and expense modeling.
  • Product and Marketing stakeholders must ensure that the plans drive seller behavior to the right solutions and customer segments.
  • HR – along with sales leaders – want to ensure that sellers remain motivated and engaged.
  • Legal needs additional time to review the compensation plan documents to protect the organization.

In short, sales compensation design will take more time this year given the impacts of COVID-19 on productivity and collaboration as well as the uncertainty triggering additional steps in the process.  Starting earlier – or adding time – is just good risk management.

Who likes free?

If you are interested to learn more about tips and tricks for 2021 sales compensation planning and design, please join me and my colleague, Steve Herz, for a free webinar –  Establish an Effective Sales Compensation Design in 2021.  During that session, we will answer your questions and help you:

  • Understand the unique risks and challenges of 2021
  • Enhance the decision-making confidence of key stakeholders
  • Lay the foundation for effective messaging and change management

Please join us on Tuesday, September 15th at 11 am EST.

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Category: sales-compensation  sales-strategy-and-operations  

Dave Egloff
Senior Director
1 years at Gartner
20 years IT Industry

Dave Egloff is a Senior Director, Analyst in the Gartner for Sales Leaders practice. His current work focuses on key initiatives in sales strategy, sales operations and sales compensation. Read Full Bio

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