A Comprehensive Guide to Modifying Your Sales Incentive Plan Regularly

January 16, 2024
Sheetal S Kumar
Sheetal S Kumar
Sheetal S Kumar
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Sales incentive compensation is a powerful tool in driving motivation and performance in your salesforce. It is that decisive factor in boosting your sales performance, retaining your high-performing sales force, and attracting newer top talents to your organization. 

With so much of your sales activities directly and indirectly dependent on the sales incentive compensation plan there needs a system where you regularly evaluate its effectiveness in bringing out the desired results. 

So what are the expected outcomes of implementing a sales incentive compensation plan in your sales management?

  • The primary expectation from sales incentives is to motivate and boost sales performance. 
  • An enhanced sales performance will contribute to an increase in sales and revenue. 
  • It helps in aligning the individual and sales goals with the larger company objectives. 
  • Incentives encourage sales reps to strategically plan and achieve their sales quotas
  • Sales incentives imbibe a competitive spirit in sales reps to outperform the competitors and thereby drive sales and growth. 
  • Sales incentives ensure there is continuous improvement in the salesforce.
  • Companies with good sales incentive programs attract top talents and make the hiring process easier. 
  • It ensures that the financial resources are effectively utilized depending on the performance and achievements of the sales force. 

This is just the tip of the iceberg of what more sales incentives can offer to build effective sales operations and management. 

However, the effectiveness of sales incentives in bringing the desired results also depends on how regularly you evaluate and revamp. 

Thus an organization with an in-house sales team must be always on the lookout for ways to modify and improve its sales incentive compensation plan regularly.  

But why modify sales incentive plans regularly?

The simple answer to the question is sales teams must modify their sales incentive program when they start to see signs of not getting the desired results. It means the program is not effective enough. 

But why modify sales incentive plans regularly
  • Building a sales incentive program is not a one-time effort. With changing markets, company strategies, and objectives, sales incentives must also be put under scrutiny to ensure that it is adapted to meet the current requirements. 
  • This means that when the company objectives and sales strategies change, so do the responsibilities expected of a sales rep. To ensure that they consistently improve in their activities and performance, there needs an evaluation of the existing sales incentive program.   
  • An organization can have sales reps spread across various products, regions, and territories. A tailor-made incentive program will not work for their differentiations as a product easily sold in one territory won't have many buyers in another. 
  • An incentive program that has been running for a very long time will reach saturation where the rewards and commissions are not as attractive and motivating as it was then. 
  • Over a period of time, sales reps might find loopholes in the incentive system where they easily receive their commission, or unnoticed calculation errors can creep in that lead to leakage. 
  • Else organizations must evaluate and modify their incentive program simply because it is not giving you the targeted results it was initially intended. 

Therefore, organizations need to invest effort, time, and resources to ensure their sales incentive program guarantees consistent delivery of desired results.

For further reading, check Commission Accounting: Streamlining Incentive Compensation. 

Best practices for modifying your incentive plan

A sales incentive modification can be minor which involves changing one component of the incentive program or a major modification that runs across multiple teams. 

Whatever the scale of sales incentive modification there are a few best practices that will optimize and enhance your overall sales incentive compensation program. 

Best practices for modifying your incentive plan
  • Build Clear Objectives

There needs to be a clear motive and purpose for modifying your compensation plan. As it can create a hassle throughout the sales process, there must be clear objectives that you are aiming to achieve and issues that you are trying to resolve. 

Taking a systematic approach to compensation modification helps in easy implementation post-execution. 

  • Ideate with Recipients

Compensation modification involves investing time, effort, and resources. Hence, to ensure its effectiveness there needs to clear communication with the beneficiaries and stakeholders. 

Getting ideas and feedback from sales reps will help understand the drawbacks of the current program, formulate a modification that will resolve the shortcomings and effectively execute it throughout the sales teams.  

  • Understand Market Trend 

Sales incentives have a direct impact on the hiring and retention of high-performing sales reps as well as boosting those who lag. Hence, to ensure incentives as an effective motivational tool, there needs a regular market study to understand the competitor's status. 

Sales compensation programs must be modified to be on par with the market trends to ensure no employee feels underpaid or demotivated in their strategic journey to achieving sales and quotas. 

  • Ensure Budget Capability

The finance team must be an integral part of the compensation modification process. This ensures that the revamp is a realistic endeavor that takes into consideration resource allocation, budget availability, and effective utilization of incentive compensation. 

Compensation modification must estimate the practical budget capabilities that can be designated for the overall sales compensation program. 

  • Track Progress 

Sales modification is a long, tedious, and complicated process. The effectiveness of this must be evaluated through measurable goals. This involves enhanced sales performance, an increase in sales quota achievement, faster conversion rates, and higher closing of deals. 

Tracking the progress through milestones and metrics helps ensure the effectiveness of the modified compensation plan in meeting the current requirements and giving the desired results.  

  • Collect Output

The beneficiaries of sales compensation plans are sales reps. Therefore after a few months of running the new plan, it is important to gather feedback from the salesforce on their opinion about the effectiveness of the modification process and the current sales incentive program.  

Their feedback and opinions are valuable insights that help understand how much of the challenges it has effectively addressed and resolved. These insights will lead to further modifications that help in keeping the incentive program efficient and productive. 

Incorporating best practices will help streamline the modification process and make the execution and integration seamless into your sales operations. 

For further reading, check How to Calculate Sales Commission & Maximize Your Earnings. 

How Kennect helps in sales plan modification

Sales incentive modification can be a tedious and complex process. It can be a long process involving identifying errors with the sales compensation plan to finally executing the revamped plan throughout the sales teams. 

In such situations, Kennect’s incentive automation solutions can help simplify the process of sales incentive modification by offering several benefits. 

 If there are any modifications in the incentive plan, our automation solution will help reduce the repetitive tasks thereby reducing the likelihood of errors. 

Any modification in the plan can be directly configured on the front-end UI itself which helps organizations quickly implement the changes into their incentive program. 

There can be variations in incentive plans based on roles, departments, or performance metrics. Therefore Kennect's solution provides flexibility in modifying plans to align with changing business objectives.

Our automation tool can analyze large sets of data to identify patterns and trends. This data-driven approach can aid in making informed decisions about which aspects of the incentive plan need modification to better align with business goals. In addition, the tool maintains an audit trail by documenting all changes made to incentive plans. 

Kennect automation tool facilitates clear communication by generating automated notifications or reports to affected employees, keeping them informed about changes in a transparent manner.

Kennect offers cutting-edge solutions that automate your entire sales incentives process, saving you time and ensuring accuracy. No more spreadsheets, no more errors – just efficiency.


Sheetal S Kumar

Sheetal is a content strategist and writer at Kennect. She has extensive writing experience in content marketing and research, focused on small business enterprises and B2B Saas. She is passionate about creating engaging and insightful blogs while exploring the power of content and social media.


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