Misalignment Identification II

...there are some indicators that can prove helpful in identifying misalignment.

There are no formal diagnostics that can be used to determine whether a company's sales compensation program is aligned or misaligned.  However, there are some indicators that can prove helpful in identifying misalignment.  They include the following scenarios:

• Making a good business decision is financially punishing (or at least not financially rewarding) for a sales representative.
• The difference in the rate of change for sales reps' incomes and company profitability are significantly different --for example, rep incomes have appreciated much more than company profits.
• It is difficult to change account assignments between representatives even when they seem obvious.
• There are frequent discussions between sales representatives and management about what is "commissionable" and what isn't. 
• The annual budgets or goals assigned to sales representatives are either accepted suspiciously easy or with an undue amount of difficulty.
• An identifiable trend exists in which sales reps manage their results be as close to 100% of budget as possible, or an every other year pattern in which one year a rep hits the goal but always misses the following year.
• There is ongoing negotiation around employment terms and conditions--car allowances, travel and entertainment expenses, and house accounts with an increasing frequency of "special deals" being cut.
• Sales reps either never leave the company or turnover is higher than in peer companies.
• It is difficult to get the sales force to effectively respond to short-term opportunities such as new product introductions.
• Sales reps and managers are satisfied with current levels of business and equate stable territory revenue with acceptable performance.

ACTION POINT: Look for any of the above scenarios in your business.