Mrs Lista, which remuneration model does SAP use for sales staff? A commission model or a target bonus model?
Diane Lista: SAP uses a target bonus model with the bonus amount set as a percentage of the Total Targeted Cash (TTC) for each role.
For sure SAP has defined a couple of core KPIs for this remuneration model.
Diane Lista: For the sales representatives and their direct manager, the most important KPIs are the sales they generate, measured by Software Revenue and/or Bookings for Cloud Subscriptions. The primary goal for the reps is driving sales, but the sales must align to the customer needs. Therefore, sales management also has measures to ensure that SAP is building long term relationships with their customers. The overall model and process is consistent across SAP globally, including the bonus framework and the KPIs included. There are local differences due to regulations and market prac-tices, such as the percentage of pay at risk and allocations to specific KPIs. Overall, we strive for consistency whenever possible.
Who does develop the remuneration package for sales staff? Sales managers or HR in cooperation wie Total Rewards?
Diane Lista: Total Rewards is responsible for devel-oping the final package, working closely with the Go to Market team and the finance organization. This ensures that the bonus plan aligns with the objectives of each specific role.
Many international companies have been discussing the interactions of bonus, motivation and performance for recent years. SAP has changed the individual variable remuneration. Does this change apply for the remuneration for sales staff, too?
Diane Lista: SAP’s Sales Bonus plans are aligned to the same principles and strategy as the those for Corp-orate Functions or our Knowledge-Workers. Pay for performance is a fundamental concept for both plans. SAP reviews and updates their Sales bonus plans annually to ensure they remain aligned with the current strategy and market trends. For sure the level of measurement is different, within the Sales environment we still stick in general on individual targets/quotas, whereas in the area of Corporate Functions or our Knowledge-Workers we are looking more for achievements on company-/team-level.
What are new trends in remuneration for sales staff worldwide in the market?
Diane Lista: Generally speaking, in the technology industry, Sales needs to support customer digitalization by offering the appropriate solutions and ensuring the success of the customer. The trend is to make sure that employees engaged in the sales process have a vested interest in the successful outcome. We have yet not an answer on how this will finally change the compensation structure for our sales-force, but criteria as customer satisfaction, renewals rates etc. will become more relevant.
Interview: Dr. Guido Birkner.