2018 Sales Compensation Plan Development Timing

Upper Saddle River, NJ – July 20, 2017 – If you’re contemplating an update or revision to next year’s sales plan, the third quarter would be the ideal time to start.  From a company’s administrative perspective, sales compensation schemes are the most dynamic, controversial and financially sensitive programs in your pay arsenal, and from the human perspective, sales plans generate the most emotional and dramatic reactions from participants, management, finance and other employees.  No wonder sales plans are the unwanted child in an organization’s family tree.

Proper planning for assessing or changing sales plans takes time and is both multi-phased and multi-faceted.  Items that should be considered are:  satisfaction surveys, last year’s revenue and profit results, current year-to-date financial results versus plan, external macro-economic factors, market shifts, inventory, next year’s forecasts (internal and external), revised marketing strategy, sales organization structure changes, plan modeling and communications (just to name a few).

Working the calendar backwards, sales departments usually plan an early December year-end meeting to review current year results and communicate plans and expectations for next year.  This means any changes to the sales plans need to be finalized and approved before Thanksgiving.  That leaves the July through October timeframe to effect all the project steps enumerated above.  Further, waiting until the fourth quarter to start this process might clash with all the other year-end processes that consume the entire organization: budget approvals, performance management, salary increase process, incentive plan administration, etc.

Therefore, the sales plan review/update process should start before the end of July to ensure adequate resource response.

About Compensation Resources, Inc. (CRI):  CRI provides compensation and human resource consulting services to mid- and small-cap public companies, private, family-owned, and closely-held firms, as well as not-for-profit organizations. CRI specializes in executive compensation, sales compensation, pay-for-performance and incentive compensation, performance management programs, and expert witness services.

Harry Schum

Senior Consultant

Compensation Resources, Inc.

877-934-0505 · Fax: 201-934-0737