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Archive for the 'Miscellaneous' Category

Funny Sales Performance Video of the Week

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Which SPM Vendor “Sucks” the Most?

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Every day some people are landing on LeapComp by searching for “[vendor name] sucks”, “which SPM vendor sucks”, etc. I thought I would share my perspective on this matter. I think I probably got some attention?

I don’t think that any sales performance compensation vendor can claim that 100% of their customers are very satisfied with their solution. There is often at least a few people who have had a bad experience and like to believe that it’s all the vendor’s fault.  So what else can cause an SPM project to fail?

Look in your own yard
Did you nail down the requirements properly? Was the scope well defined and communicated? Did the scope slowly creep up until the project was an entirely different beast? Did new requirements enter the picture? Did you support the implementation team adequately by providing them with all the documentation, information, access to subject matter experts, etc, in a timely manner? Did your team provide the required help when necessary and actively helped out with the implementation efforts? Was the schedule reasonable or did you have try to cut corners by skipping over some planning or testing efforts?

Not the right solution?
So maybe from your implementation-support perspective, everything was flawless. So could the problem be that the solution you selected didn’t meet your needs? If you do a poor job at defining the project scope and high level requirements before selection a commercial solution, how will you know if it really meet your needs. Ahh, but that’s the Catch 22! How are you supposed to really know all your needs without knowing more about the solutions? Maybe you KNOW that you want to do analytics, but you don’t really know what the application can do for you exactly… So you end up selecting a solution claiming to have best-of-breed analytics only to realize that it can’t do what you want. Read my vendor selection posts for more ideas on how to select the vendor who will best meet your needs. Hint: I think it’s a good idea to get help from someone who knows what they are talking about and who have worked with many SPM solutions… but I could be biased, that’s one of the things I do for a living.

Maybe it was your implementation partner that was not so great?
Could you do all this and still have a failed project? Yes! You spent all this time selecting a vendor, but how much time did you spent selecting an implementation partner? Maybe you just assumed that a big system integrator like Accenture and Deloitte were the best because they are already working with your company on other projects. Or maybe you selected the cheapest company on the block. Maybe you just selected the vendor’s implementation team thinking they must be those who know their products the best. I would assert that even more important than selecting the right solution, you must ensure that there is a good fit with the implementation partner you select. After you choose a solution, you won’t need many interactions with the vendor; but with the system integrator, you will need to work with them for some time! Do your homework, check their references, find out other companies who have used their services and ask them about the outcome of the project. I wrote another short piece about choosing an implementation partner where I discuss some pros and cons of large companies, versus vendors, versus boutique consulting firms.

In conclusion, before deciding to exclude a vendor from your search based on some horror story, consider that any failure to an enterprise system integration can be caused by many factors, and that the vendor is [usually] never fully responsible for the failure.  Also make sure that you select the best implementation partner.  Finally, support them well during the implementation.

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Super Bowl 43 (XLIII) and Bonus Incentives

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I’m sitting at home looking at the count down for the Super Bowl to start. Not because I’m a particularly big fan of the Steelers or of the Cardinals, but because many people asked me if I was going to watch it and I needed to find out when it was going to be on TV. I often get asked what is the biggest challenge for me to work in the United States. My answer is: “converting Celsius to Fahrenheit, crossing US customs, and talking about football”. As a consultant, you can’t underestimate the importance of being able to do small talk with clients.

During the Olympics, I wrote a very popular post about incentive compensation for Olympic athletes. We found out that the United States paid $25,000 for a gold, $15,000 for a silver and $10,000 for a bronze. Notice how there is no monetary incentive for athletes who didn’t win any medal.  I was thinking, surely Super Bowl winners must have an incentive to win as well; and there is. I found out the historical bonus payouts here.

Super Bowl - Winner/Loser
I - $15,000/$7,500
II - $15,000/$7,500
III - $15,000/$7,500
IV - $15,000/$7,500
V - $15,000/$7,500
VI - $15,000/$7,500
VII - $15,000/$7,500
VIII - $15,000/$7,500
IX - $15,000/$7,500
X - $15,000/$7,500
XI - $15,000/$7,500
XII - $18,000/$9,000
XIII - $18,000/$9,000
XIV - $18,000/$9,000
XV - $18,000/$9,000
XVI - $18,000/$9,000
XVII - $36,000/$18,000
XVIII - $36,000/$18,000
XIX - $36,000/$18,000
XX - $36,000/$18,000
XXI - $36,000/$18,000
XXII - $36,000/$18,000
XXIII - $36,000/$18,000
XXIV - $36,000/$18,000
XXV - $36,000/$18,000
XXVI - $36,000/$18,000
XXVII - $36,000/$18,000
XXVIII - $38,000/$23,500
XXIX - $42,000/$26,000
XXX - $42,000/$27,000
XXXI - $48,000/$29,000
XXXII - $48,000/$29,000
XXXIII - $53,000/$32,500
XXXIV - $58,000/$33,000
XXXV - $58,000/$34,500
XXXVI - $63,000/$34,500
XXXVII - $63,000/$35,000
XXXVIII - $68,000/$36,500
XXXIX - $68,000/$36,500
XL - $73,000/$38,000
XLI - $73,000/$38,000
XLII - $78,000/$40,000

It’s interesting to see that winners AND losers will earn some money. Every player will receive a minimum of $40,000. With around 52 players on each team, the total bonus amount will exceed 6 million dollars! But in perspective, that’s not so bad…

Interestingly enough, the Steelers had the highest median salary in the NFL at $1.1 million in 2006. The NFL’s average salary in 2006 was 1.4 million.  Since that no matter if a player wins or loses he is sure to take home $40,000, the monetary incentive to win is “only” an additional $40,000… in other words, only an average of a 3% bonus over his base salary.

I’m sure the majority of the players don’t even think about such a “small” incentive during the Super Bowl. If the bonus was bigger, maybe they would think about it more, but even if they did, I doubt it would make a big difference. It’s hard to imagine that anyone making it this far won’t give their 100% during the game.

So if the bonus probably does not affect the outcome, why have it in the first place?  Because that’s how it has been for the past 43 years.  But is that a good reason?

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Non-Cash Incentives

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I briefly talked about non-cash incentives here, but I need to repeat some of these fundamentals to introduce tomorrow’s topic.

Non-cash rewards are used to motivate employees, reward them for their performance and encourage specific behaviors. Whenever I need to know anything about non-cash rewards, I turn to Paul Hebert who runs the Incentive Intelligence blog. In an old post, Paul says that “cash and non-cash are both critical in creating an engaged audience. Neither is better. Neither is worse.” He defines both type of rewards as follows:

Paychecks and cash bonuses are transactional - they communicate an “impersonal” relationship. They do focus attention, create direction and communicate goals and objectives. But they are cold. Income and cash bonuses are things that are negotiated. They are bartered and dealt. They are things you don’t talk about at parties with your friends.

Non-cash - whether that be merchandise, travel, recognition, plaques, etc. - are emotional. They are talked about at parties. People show off their pictures of the trip they took or watch the game on the big screen they earned - and brag about it. People don’t show you their bonus check.

He concludes his post by saying that both type of rewards must be used together to “shape, reinforce, change and maintain behaviors that help people stay in alignment with business goals and objectives”.

Since I wrote my non-cash reward article, the economic crisis became more pronounced. This has caused many people to complain that they really couldn’t care less about all the “useless” rewards they are receiving, and that their company should just give them more money instead. I’ve heard that from people who have been receiving paper weights, company clocks, shirts with a company logo on it, etc.

But on the other hand, many people who have more flexibility in what they can get as a non-cash reward, have been bragging about it. They argue that even if the economy is not great, that their company is still treating them very well!

I think that the obvious conclusion is that sometimes, a non-cash reward can do a better job at motivating the workforce than what the cash equivalent could have done. One of the key for the non-cash rewards to work is to offer something that the employees actually want. Since it is very unlikely that they’ll all want the same thing, flexibility in what they can get is the secret.

Companies should also be careful not to “overdo” non-cash rewards. Employees still care about cash, and still need it. If incentive compensation is significantly reduced at the expense of non-cash rewards, employees could get frustrated.

As with most things, it’s all about striking the perfect balance.

But no matter how well your incentive budget is distributed between cash and non-cash incentives, letting your employees know that they are appreciated does not cost anything and will go a long way in motivating them.

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Event Calendar and Upcoming Events

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This is just a quick reminder to check out the LeapComp SPM Event Calendar once in a while, or to subscribe to my event RSS feed.

There are two exciting webinars taking place tomorrow; Best Practices for Sales Compensation Management, and Salary Incentives and Strategies in Executive Recruitment in a Challenging Economy.

Don’t miss them, and if you attend, please come back to discuss.

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In the News this Week…

LeapComp Launches Incentive Compensation Event Calendar

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I’ve been playing with different “plugins” for event calendars and I think I finally found one which I like.  In the side menu you will find the two events I have entered so far…  I’m planning to post all incentive compensation webinars and conferences I can find…  So if you are a vendor or if you are aware of an event which is not included here, please let me know.

On January 22, there is a webinar on the best practices of sales compensation management, hosted by Astadia and Xactly.

On January 28, there is another webinar on reporting and analytics, hosted by Merced Systems and OpenSymmetry.

You can see both of these dates highlighted on the calendar.  When you place the mouse cursor over one of the date, the name of the event and its time will pop-up.  When you click on the date, all the details will be displayed, including where to go to register.

I hope that you will find this feature useful!

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