Three Hidden Dangers Lurking in Your Sales Comp Plan

Chad Albrecht and Russell Schubert

( /-/media/pdfs/mps_three_hidden_dangers_v1.pdf?la=en )


> Download ( /-/media/pdfs/mps_three_hidden_dangers_v1.pdf?la=en )

There are a lot of moving parts when it comes to appropriately rewarding and incentivizing your sales force within the medtech industry. And when you’re trying to stay abreast of all of those moving parts—pay benchmarking, quota-setting, new hire plans, long-term incentive programs, President’s Club—it can be difficult to take a step back and spot potential issues before they turn into full-blown problems.

According to ZS’s 2016 Incentive Practices Research study, which surveyed 28 sales plan administrators in the medtech space, one-third to nearly one-half of companies leave secondary elements of their compensation plans alone until problems present themselves. While elements such as plan design and benchmarking are usually top of mind for evaluating potential problems, elements like President’s Club and quota-setting—typically critical elements of an overall compensation program—are left alone to avoid upsetting the status quo. Other elements, such as new hire plans, can be forgotten altogether since they aren’t on the whole team’s radar.

Many medtech companies, it seems, are failing to give their sales compensation plans regular, comprehensive checkups, or they’re reviewing them too infrequently or too late in the game to address the negative impact on motivation that occurs because of poorly performing plans. Even when companies do proactively evaluate their sales compensation design, they do so in siloes: 50% of the time, teams from finance and HR aren’t involved in sales compensation plan assessments, and 20% of companies relegate these assessments solely to the sales operations team. This calls into question how effective those assessments can be without input from important stakeholders, departments and plan participants. Based on our survey findings, it’s clear that many medtech companies take a reactive, rather than a proactive, approach to evaluating their compensation plans. And unless you’re proactively identifying and resolving potential issues, these hidden dangers might present themselves as full-blown problems within your overall sales compensation strategy.

About the Experts




Chad Albrecht is a principal based in ZS’s Evanston, Ill., office and leads the company’s B-to-B sales compensation practice. Chad has helped numerous clients create and implement motivational sales incentive plans and set fair and challenging sales quotas. His clients include companies in the medical device, pharmaceutical, high-tech, manufacturing and business services industries. Contact Chad at chad.albrecht@zs.com ( mailto:chad.albrecht@zs.com ) .




Russell Schubert is a manager in ZS’s Evanston, Ill., office and has worked with numerous medical device, products and services companies to find solutions for a variety of issues related to incentive compensation, helping to design and implement incentive compensation plans and quota-setting processes. Contact Russell at russell.schubert@zs.com ( mailto:russell.schubert@zs.com ) .