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4 Sales Performance Management Tips for 2022

If there is one word to describe 2022, it’s “uncertainty” – a word that is not welcome in the world of selling and sales management. As compensation professionals, what can we do to support sales success in times of uncertainty and change?

2020 threw everything off track when the pandemic hit, forcing sales teams to pivot to new strategies like remote selling and zoom meetings, while expectations and quotas were slashed. In 2021, though the face-to-face world was still a challenge, companies were ready to get back to the business of selling but then we heard about a “Great Resignation” that put sales management in fear of losing their sellers.

After two years of adapting to an altered selling environment, can we get back to old school sales performance management (SPM) in 2022? If not, what will SPM look like in the coming year? Does sales incentive compensation still play the leading role in driving sales behavior?

While there is more to selling than just quotas and commissions, sales compensation and the way it is delivered and communicated make a big difference in successful sales organizations. Here’s a short list of what sales operations and compensation administrators can do to support successful sales teams in 2022:

  1. Ensure fair and transparent compensation
  2. Communicate clear plans and targets
  3. Deliver operational excellence
  4. Track compensation effectiveness

If you take on these four initiatives in 2022, putting in place the technology and processes to support them, you will be well on your way to establishing a top performing sales organization, able to adapt to changing circumstances. 

1 - Ensure fair and transparent compensation

Nothing is more frustrating to salespeople than having confusion around how they are compensated. Money is important, yes, but it’s not the only factor in sales team satisfaction. Like any employee, sales reps want to know that their compensation is fair. That means they should be able to see that they are paid competitively versus the market, and equitably within their organization.

If any department should be a meritocracy, it’s Sales. Therefore, there is no place for pay gaps or bias in sales compensation. But with a large and perhaps global sales force, how can management be sure there is no gender pay gap, or other pay inequity based solely on bias? It can take some deep analysis to find out, but that analysis can save you from lawsuits and compliance risks, as well as from losing top performers.

In addition to fair pay, compensation should be transparent. Transparency establishes an environment of trust in the SPM solution. It enables full auditability and traceability while eliminating most disputes. It lets sales reps focus on selling, confident that they will be rewarded in a predictable way for their successes.

​​A centralized sales compensation platform can do all of this and more to support your sales team. Your rep should be able to see exactly how their pay was calculated whenever they want. Your compensation system should be able to give daily updates on commission earnings, and show precisely how those commissions were calculated, traceable to the sales transaction, and showing the math.

2 - Communicate clear plans and targets

In an era when there is less opportunity for face-to-face interaction and direct pats on the back, it’s more important than ever to communicate to sales people that they are valued. Rewards are one way that a company can say thank you and express to sales people that they are important. Sales compensation plans should be available on demand to sales reps from their compensation portal, not lost in a spreadsheet or buried in an email.

Same goes for sales targets. Sellers should be able at any time to see their current targets and their performance against those targets, along with the current and future potential earnings if targets are met. Having a clear goal and seeing how you are progressing towards that goal is motivating.

Your company probably does a lot to reward and retain salespeople, so make sure they know it. Make sure they can access their total rewards statements on demand at any time. Make sure those statements pull together all forms of compensation, benefits, and non-cash rewards, including salary, bonus, sales commissions and incentives, long-term incentives, company car, housing allowance, medical benefits … everything. 

In order to generate total rewards statements in a timely fashion, the process should be automated, meaning that the needed data feeds should be integrated into the compensation data repository for easy reporting.

3 - Deliver operational excellence

Success breeds success, and excellence breeds excellence. Sales Operations has the opportunity to set a standard of excellence in the company by delivering efficient sales compensation administration. It’s not a simple task, but doing it well is the hallmark of a well-managed company. Operational excellence creates pride in the organization and gives sales reps confidence that they are representing a company that can deliver on its promises.

The post-pandemic era calls for flexibility and mobility. It is a time to have systems that can adapt to remote work and a mobile enabled salesforce.

As we noted in an earlier blog about the sales automation revolution, an automated sales compensation platform can transform your sales operations by reducing manual tasks, improving accuracy and compliance, and providing deeper insights for strategic decision-making. With advanced data and analytic capabilities, an SPM solution can give your organization a true competitive edge.

Be prepared for success. Make sure the systems and processes you have in place will be able to handle growth. If your compensation system is already straining at the seams, how will you be able to scale? Operational excellence can be the game changer for your company.

4 - Track compensation effectiveness

Since your people are your biggest expense, they're also the biggest determining factor in whether you achieve your margin targets or not. Compensation effectiveness simply means that your investment in salaries and incentives correlates to performance. In other words, are you getting the best “bang for the buck”? If you can measure and understand your compensation effectiveness, you can control cost, control margins, and ensure you are getting results for your compensation spend.

An automated total compensation platform can give you granular visibility into where you are getting a good return on your compensation spend and where you aren’t. Where compensation effectiveness is relatively low, it may reveal an opportunity for coaching. Are sellers discounting too much? Are they not targeting the most profitable opportunities? Or, are comp plans out of alignment? Is there simply an error in commission payments?

Get ready for success

It’s always good for a sales organization to be flexible and adaptive, and in current times it seems to be a necessity. But whatever the coming year brings, the tenets outlined above are the building blocks of a motivated and efficient sales organization and will serve you well. 

Could new compensation technology simplify your operations and accelerate your sales? Download our free guide, 8 Signs Your Sales Compensation System is Holding Your Business Back, to find out.

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