This summer, many parts of the world experienced natural and man-made disasters. The loss of life and damage to property from these events received extensive media coverage. Because of this attention, many customers have asked us for guidance on designing policies and business rules to address the potential impact that disasters can have on their field sales incentive compensation (IC). Ta. IQVIA offers his five tips to help you build an IC-related disaster policy for your organization. We strongly recommend that you develop a policy before a disaster occurs.
Define eligibility criteria and establish a process to determine impact
When developing eligibility criteria for salespeople to receive disaster relief, consider factors such as the salesperson’s location, whether the salesperson was directly affected by the disaster, and the extent of the impact on their ability to fulfill their sales responsibilities. please.
It can be helpful to refer to objective sources such as trends in sales data before, during, and after the event. Government-issued disaster declarations (in the United States, these declarations are often defined geographically by zip code or county). Call data showing impact on customer access.etc
- Naturally, the first thing to think about is personnel in the actual affected area, but there are also potential impacts to the supply chain. If a manufacturing or distribution base is affected, many other areas outside the affected area may also be affected. It may take some time for this situation to become clear.
Identify and evaluate relief options
Depending on the IC plan design, relief may take the form of direct financial assistance, temporary changes to sales quotas, or other support based on the specific needs of affected salespeople. It’s a good idea to have some flexibility in how disaster relief is provided so that your policies can accommodate a variety of situations. For example, the relief period may not be the same for all affected salespeople. Some regions may recover faster than others from natural disasters such as storms and wildfires.
Make consistent and fair decisions
Due to the potentially traumatic nature of disasters, it is important that relief payments are made consistently and fairly, without favoritism or bias. However, the situation can be complicated by the desire to act quickly to assist affected personnel as quickly as possible. For most companies, an important step to ensure fairness is to have the IC steering committee review and approve both the underlying policy and the relief funds themselves. However, current decisions regarding relief may have future implications. Consider the answers to the following situations.
- If a disaster disrupts regional sales trends, how can fair targets be set for future pay periods?
- How does disaster relief impact annual recognition programs (such as the President’s Club), contests, performance reviews, or competitive sales metrics such as rankings?
Build lines of communication
Be sure to communicate your company’s policies to your sales representative so they understand what support is available in the event of a disaster. Establish a mechanism for sales representatives to report the situation and request redress. Identify a dedicated point of contact who can coordinate your response.
Consider legal and tax implications
Consult with your legal team to ensure relief payments comply with relevant laws and regulations, and be aware of your salesperson’s tax obligations and other financial considerations. For example, payments may affect eligibility for government-based assistance programs.
Finally, it’s important to regularly review and update your disaster relief policy to reflect changes in incentive compensation plan design and the evolving needs of your sales team.
Every organization has unique requirements and considerations for field sales incentive compensation programs. These tips should be tailored to your specific needs. Could your organization benefit from an independent perspective on how your IC program responds to disaster events?
Want to learn more about how your company’s approach aligns with that of your industry peers? Discuss how IQVIA can help your organization’s IC program or learn more about the topics covered in this blog. If you have any questions, please feel free to contact us.