For most Australian businesses, one financial year is about to end and another is about to begin.
End of Financial Year Check List for Sales Compensation Plans
Sales compensation administrators are busy closing the current month/year commissions and planning next year’s sales comp plans. Amidst the busyness it can be hard to find time to stop and evaluate: how did we go? Yet what is the point of having sales comp plans if you don’t measure your success? And if you don’t know what parts of your sales comp plans were failures or successes, how can you determine the best plans for the new year?
OKRs in Sales Comp Plans
It's a good idea to set annual and quarterly objectives. These objectives cascaded down into key result areas and micro to-do lists. The end of the financial year is the time to pull out the OKRs and do some analysis. The great thing about using the OKR process is it makes the analysis simple:
- Did we meet our annual objectives?
- If yes, how did we do it? Why did we perform well and what can we repeat next year?
- And be critical, were the objectives too easy?
- If we didn’t meet our objectives, why not? What were key result areas lacking? Did we do the work we said we would?
The lessons from this analysis should be carried into next year’s plan, carrying forward the strategies that brought success and leaving behind the unsuccessful practices.
End of Financial Year Check List
If you haven’t updated your sales incentive plan to include OKRs, don’t worry. You can still evaluate your performance using this checklist:
- How did we track to budget (spend v budget, commission cost of sale v target)?
- How does our spending line up with sales performance (e.g we were 120% over budget but our sales were 150% over target)?
- How did we track per role/per region etc (i.e what were the drivers of points 1 & 2 above)?
- What was the sales force engagement in the plan at launch - where is it now?
- Did we implement the scheme as launched (i.e did we make lots of exceptions/changes)?
- How many disputes did we have to deal with?
- What overpayments/underpayments were identified (if any)?
Once you have completed the checklist, make your own list of successes and failures. Bring the successful elements of your sales compensation plan into the new year and leave the failures behind.