This is an example of an incumbent model for one role, sorted by historical Actual % Quota (4th column). For this client merging two legacy sales organizations and moving from a commission type incentive to a market-based incentive, it was important to understand how the new plans would pay the historical high performers.
We can see in the first few rows that those who had historically under-performed vs. quota would have to perform better, though still below quota, to earn at historical levels (e.g., Name 1 would have to achieve 84% of quota under the new plan to have the same earnings paid under the old plan at 57% of quota).
This is the focus of this view. Starting with Name 6, we can see that better performance vs. quota will be needed under the new plans to earn at historical levels for some (e.g., Name 6, Name 7, Name 12), and that historical levels of earnings will be available to others at less than historical performance (e.g., Name 9, Name 11). These anomalies are the inevitable result of a merger of two different organizations historically operating under two different plans. The value of the incumbent model is in showing who is affected and by how much so that sales leaders can be comfortable that the “Winners” will win, enough.
The incumbent model results feed into the aggregate cost model. View a sample aggregate cost model here.
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.