Incentive Plan Ideas in Pandemic

2020 is not yet over and there are already talks of it being amongst the worst years in the last couple of decades. Corona pandemic has already taken many lives across the globe and has had a significant impact on the global economy. In addition, different parts of worlds have faced other natural disasters such as bushfires (Australia), locust swarms (East Africa and parts of Asia), floods (Indonesia, Sudan, parts of India), volcanic eruptions (Indonesia), earthquakes (several countries) to wildfires (California, US) making it a double whammy for them.

With COVID-19, the sales environment has shifted because of social distancing and isolation norms resulting in a lack of in-person access. New modes of stakeholder engagement are leading to an impact on all aspects of sales operations. Managing, motivating, and ensuring remote sales forces are effective and engaged during such a period is a challenging proposition. Additional complexity is arising from the fact that different parts of the countries are following significantly different infection and recovery trajectories resulting in further need of local adjustments.

Organizations are trying to assess the level of impact while working towards short-term and long-term measures to adapt to the “new normal”. Incentives and sales performance management have taken on a new dimension of complexity to adjust to this ‘new normal’ as a balance is being sought between fairness to sales reps, budgetary constraints, and revenue performance.

Following are some of the incentive strategies life sciences organizations are deploying to ensure that the sales representatives continue to be motivated and engaged (since sales incentives are significant component of their total compensation):

1. Pay Target

Pay target incentive compensation to reps for the most impacted period

2. Pay Target or Better

Pay target incentive compensation to reps for the impacted period while allowing them to earn more if they are able to beat their targets during these trying times

3. Guarantee

Pay a fixed % of target incentive compensation or a guarantee amount for the impacted period to strike a balance between field motivation and fiscal responsibility

4. Relative Performance

Index territory performance with region/zone performance or market performance to account for local variations allowing rationalization of performance

5. Goal Adjustments

Refine/adjust quotas down to account for activity and market challenges. These adjustments also needs to be tracked for future goal setting to ensure that appropriate baseline adjustments are made once business gets back to normal

6. Modify Payout Curve

Lower performance threshold to allow reps to be “in the money” at lower performance levels (know more about payout curve designs)

7. MBO Type Plan

Pay incentives based on specific activities instead of outcomes to keep the engagement high while ensuring that existing relationships are being maintained remotely

8. Team Performance

Pay incentives based on higher level performance or index performance to ensure proactive planning and collaboration

9. Pay Mix Change

Change pay mix to reduce the proportion of incentives in the total compensation

10. Contests/SPIFFs/Annual Trips

Provide cash out option for annual & seasonal contests. Avoid including peak covid impacted performance during calculations.

To summaries, organizations are evaluating the situation based on their product portfolio, level of impact and are deploying different incentive strategies. Organizations are trying to leverage and analyze data across periods to better understand overall impact and utilizing this information to take fair decisions. We do believe that sales incentive plans can be designed to be reasonably stable, motivating and fiscally responsible.

Please feel free to reach out directly to us at to know more on how you can leverage our advanced analytical expertise to take data driven decisions and stay ahead of the curve.

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