TIPS—Rules development strategies

A frequent problem when designing an incentive program is making the rules fair for the larger volume producers as well as the smaller volume participants. In many cases there is no perfect solution but there are successful strategies that you can employ. The following are three strategies for setting goal or ranking sales performance to equalize disparities between large and small volume sales performers.

1. Adjust goal setting strategies to make smaller volume salespeople stretch more, and larger volume salespeople less, then rank performance base on the percent of goal achieved.
   
   
2. Group the sales force into two or three volume groups based on historic sales performance. Rank all salespeople based on either percent of goal achieved or straight dollar volume sales.
   
   
3. Rank all salespeople based on the following formula:
   
   All salespeople receive 1 point per $1.00 OVER goal x percent over goal.
   
   Example:
   Small volume salesperson Goal: $100 in sales
   Achieves: $110 in sales
   % of Goal = 10%
   
   Formula: $10 ($s over goal) x 10% (% of goal achieved) = 1 point
   
   Large volume salesperson Goal: $1,000 in sales
   Achieves: $1,100 in sales
   % of Goal = 1%
   
   Formula: $100 ($s over goal) x 1% (% of goal achieved) = 1 point
   
   Contact if you need rules development support or recommendations.

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