Initial situation

An internationally operating mechanical engineering company is reporting stagnant sales in Germany. The company is credited with providing excellent consulting services, but sales are often closed by competitors. The sales representatives receive a fixed salary only, with no performance-based components.

Task/Objectives:

Development of a consistent compensation system for all functions influencing sales success. Increasing motivation to close machine sales in the spirit of team selling.

Implementation:

Current factors influencing sales success are being analyzed and recorded, and benchmark analyses are being conducted.

Based on the resulting findings, a basic remuneration system with possible control variables is developed. It is crucial that the employees involved are able to understand the key control variables in the future and influence them through their actions.

Once the basic system has been approved by management, the system parameters are fine-tuned and a business, legal and collective bargaining review is carried out. In the next step, an appropriate information system is established to ensure transparency and acceptance, individual contractual arrangements are developed, and transitional rules are defined.

Results:

The new remuneration system and its control parameters were presented at a staff meeting. All involved parties accepted the system and signed the new contracts.

In the following three years, the defined quantitative and qualitative targets were consistently achieved. With a cumulative sales increase of 9.5%, the multi-year stagnation was overcome while simultaneously improving the company’s profitability.