Which roles should be eligible for sales compensation plans…AND…for quotas? What are the ways to formalise the decisioning around if a sales role is eligible for a compensation quota?

Perspective

Only jobs that exhibit the criteria below should be eligible for sales compensation (and roles that supervise eligible jobs). A portion of total target cash (TTC) for all eligible roles will be “at-risk” pay. If a role is deemed ineligible, it should be moved to a salary and onto the corporate bonus plan. Variable compensation eligibility must be determined by factors that consider job function, not job title.

• Roles should be customer-facing, and preferably own customer relationships
• Roles should have responsibility for either selling all products (relationship sales) or selling specific products (speciality sales)
• Roles should be responsible for driving a significant portion of the sales process (e.g., qualification, proposal)

In order to justify using a quota for measuring sales for the role, the following criteria should apply:

• The role must exhibit direct influence over the customer
• The sales should be traceable back to the sales representative
• The territory should be of a manageable size – not too large that influence is clearly diminished

Is the job a sales job?

Too many sales roles can drive complexity and add cost with marginal or questionable influence on the outcome of the sale. Sales support, technical and marketing roles are often tagged as sales roles but each should be reviewed in detail.

The most direct method of determining sales eligibility is through the use of sales job surveys, which offer common job titles and descriptions.

Here, we score the role based on the responsibilities across three dimensions: Customer, Product and Sales Process. The scaling can be adjusted:

Eligibility points threshold based on the scoring framework

Sales Role = >10 points

Non-Sales Role = <10 points

Note: remember, you are scoring jobs not people; asking 'what should the role be doing?' Do not focus on people in the job design process – people come in later when you fill a role based on individual qualifications.