Performance pay increasingly prevalent in sales positions

Advertising and marketing initiatives are increasingly relying on incentive compensation management tools to drive future performance. Though the economy has shown solid signs of improvement and recovery, businesses are still facing talent shortages and highly competitive markets that require aggressive methods of driving talent output and creating corporate revenue opportunities.

Implementing revenue provocation
Ad Age Online reported that a recent study by the Association of National Advertisers found that more than 60 percent of organizations are working compensation solutions into their agency and personnel agreements. That's almost twice the amount of firms reporting such strategies in 2000, the source stated. This trend is growing aggressively as well – in 2010, the number of companies using this method was at 46 percent, indicating almost the same level of growth in the last three years as it took 10 years for the first interval to produce.

"If it's a method to fuel performance and success, it can be beneficial," said Scott Chapman of Partners and Napier. He told Ad Age Online that companies can gain from using incentive compensation, but only if they approach it with the right mindset and goals.

Engagement versus income
If companies want to boost output and create better gamification within their training and performance tracking, they can see positive success in numerous elements of sales team management. If, however, organizations are only looking to save money, it could prove a disaster for everything from employee engagement to overall revenue figures. Simply cutting costs on payroll through enhanced reliance on incentive compensation isn't enough to retain top personnel and still drive better output.

The important distinction that employers must draw is whether incentive compensation serves to enhance staff output or if these initiatives are actually a detriment to engagement and job satisfaction. Harris Diamond of McCann WorldGroup told Ad Age that rewards and incentives need to be tightly linked to overall performance. In order to remain profitable to businesses, though, metrics and talent analytics need to be tied to the solution to facilitate proportionate bonuses for over-achievers and average employees alike.

These utilities can drive better overall performance if used appropriately, but such implementation requires more than a modicum of tweaking, assessment and careful evaluation from both the administrative and recipient perspectives. As CFO Online stated, personnel at all levels of the organization should be involved in reviewing corporate performance in terms of incentive compensation. There are many variables, such as talent retention, quarterly revenue and overall business health that need to be considered when adjusting incentive compensation to meet organizational goals.