Gartner Research

Controlling Sales Compensation Spending Risk Without Demotivating Sellers

Published: 27 March 2019

ID: G00387946

Analyst(s): Steve Herz

Summary

Effective compensation plans both motivate sellers with the chance for rewards and guard against overspend on total payout expense. Sales operations leaders can balance these objectives by adopting design practices to identify, assess and target the most critical risks for payout overspend.

Table Of Contents
  • Key Challenges

Introduction

Analysis

  • Build Spending Risk Checkpoints Into the Sales Compensation Design Cycle to Structure Risk Analysis and Enhance Decision Making
    • Recommendations
  • Focus Compensation Plan Mechanisms Narrowly on Identified Risks to Avoid Unintended Limits on Seller Earning Potential
    • Design for the Footprint and Size of the Uncertainty
    • Use All Available Compensation Mechanisms
    • Manage Systematic or External Risk When Needed
    • Recommendations

Gartner Recommended Reading

©2020 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. and its affiliates. This publication may not be reproduced or distributed in any form without Gartner’s prior written permission. It consists of the opinions of Gartner’s research organization, which should not be construed as statements of fact. While the information contained in this publication has been obtained from sources believed to be reliable, Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Although Gartner research may address legal and financial issues, Gartner does not provide legal or investment advice and its research should not be construed or used as such. Your access and use of this publication are governed by Gartner’s Usage Policy. Gartner prides itself on its reputation for independence and objectivity. Its research is produced independently by its research organization without input or influence from any third party. For further information, see Guiding Principles on Independence and Objectivity.

Already have a Gartner Account?

Purchase this Document

To purchase this document, you will need to register or sign in above

Become a client

Learn how to access this content as a Gartner client.