Our answer here is, “tightly and directly.”
Here’s the chain:
- Business strategy
- Operating objectives for the coming year
- Expected contribution of the sales organization to achieving those objectives –> sales goals
- Sales roles with objectives aligned to achieve overall sales success –> key accountabilities by role
- Sales compensation plan measures and goals/quotas
So there’s a direct chain that goes from the business strategy all the way to the measures and objectives in the sales comp plans. If you can’t demonstrate these linkages, your sales compensation plans may not be doing all they can to support your business’s success.
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.