Sales Compensation Plan Assignment

(Don't copy/paste)

THE PROJECT:

Background:

Your Selling Career at Black & Decker continues to progress.You have been promoted to the position of a Regional Sales manager and made a member of thecompensation committee.

_________

In this new role, beyond leading a team of Territory Managers [TM's], you have been assigned the task of studying and recommending to the SLT [Senior Leadership Team], The Executive committee and an external consultant {TCG- Toronto Consulting Group] on a NEWsales compensation structure.

The problem:

Simply put the company is experiencing high levels of staff turnover (leaving the company or going to different departments) plus the lack of performance (over achievement of quota) by the Best/Top Sales Representatives.

The Challenge from the SLT is: Study, and Recommend (as part of the Sales team) the following deliverables:

Your Assignment: Recommend a Sales compensation Plan which includes the following:

Outline the elements (fixed salary, if any, variable pay) of the sales compensation plan (by role / level):

Level 1: Inside Sales (IS) , [4]

Level 2: Territory Managers (TM's) , [10]

Level 3: Regional Sales Managers RSM's [3]; National Account Managers

NAM's [4]

NOTE: Numbers in brackets above [4] - are number of salespeople in each role

Assumptions forTotal Compensationat each level:

Level 1= $50,000(OTE) * On Target Earnings (earnings when target/sales quota is achieved)

Level 2 = $100,000(OTE)

Level 3 = $150,000(OTE)

When considering the compensation plan include:

1.Core Elements: [base pay, commissions, bonuses]. How much should be Fixed earning Versus incentive pay (for each level).........

2. If Using commissions in the sales compensation plan- Identify if [Absolute, relative, straight-line, gross margin] and why you selected the one you did........

3. Draft a budget based on the title, number of peoples at each level and split out by Fixed, Variable and Total Expense based on Sales plan/quota (i.e. what will be the total cost if targets/sales quotas are achieved 100%)......

• What would happen to the budget if the company exceeded the target by 20% ?...
• What would happen to the budget if the company fell short of the target by 20%?..........
• NOTE: For Budget Calculations, assume that the sales target is $100,000,000.

4. Outline what potential challenges sales compensation plans must avoid and describe how your plan will ensure these challenges are avoided.............

Note: Consider the following challenges: complexity of the sales compensation plan; capping sales compensation, less motivated employees and motivating higher performance plus any other challenges you can offer.

5. Since Sales Staff Turnover has been raised as a key concern, outline what plan elements you would include to ensure better staff retention......

NOTE: Include in your thinking: Hiring/ onboarding (discuss with candidates what to look for/ industry choices and career paths; Long -term job outlooks; types of compensation and personality fit)

Also Consider: Salesperson motivation, training and performance management elements to better ensure the sales team stays engaged.

6. Exiting Sales personnel have identified Time management and their ability to actually spend time with clients as a key barrier to successfully achieving goals.....

• As Part of this proposal, outline what time management "Tools & techniques" you would incorporate to (a) better allow the sales team to achieve goals and (b) reduce stress and frustration.

Note: Consider tools and techniques including but not limited to: Working from a list/prioritizing activities/automating administrative tasks/ creating templates (emails, etc); minimizing distractions, and multitasking challenges.