Among our clients I would say that companies are about as likely to lower thresholds as to raise them.
The logic for raising thresholds in this economy would be to protect profit. The logic for lowering them is that we are not nearly as confident in our quota setting accuracy in this economy – so while we “knew” that 70% of quota was unacceptable performance last year, this year we’re not so sure where the unacceptable attainment will fall. (And, by the way, that is the point at which the threshold is often set – the level of performance below which the sales person is clearly not performing acceptably, and likely to be on formal notice.)
Donya Rose, CSCP, is Managing Principal of The Cygnal Group. She is a recognized expert in sales compensation plan design, regularly speaking at conferences and writing published articles. She serves clients from F500 to growth-stage businesses, and advises WorldatWork on sales compensation hot topics and best practices.