EIM and SPM system and related commentary presented by Canidium

Living by Numbers in SPM

Friday, June 26th, 2009 | Non cash incentive, SPM, analytics | No Comments

Nike+ with iPod Nano

An article in the July 2009 issue of Wired magazine describes the growing popularity of a running training aid system from Nike. The system, called Nike+ (wiki page here) consists of an electronic sensor that attaches to a runner’s shoe; the sensor feeds data to a storage device, the Nike SportBand, or an Apple iPod fit with a small receiver. The system records running duration, pace, and distance data which can then be uploaded to a website allowing for goal setting, tracking, and comparison with other users of the device. Since the introduction of the product in 2006 1.2 million runners have collectively logged more than 130 million miles. Friendly competition and challenges such as fastest 5 miler or first to 50 miles this month type contests amongst groups of users has proliferated. What is behind the device’s popularity? The article cites a famous study performed at Western Electric’s Hawthorne manufacturing plant in Illinois in 1920. Management, trying to discover the most favorable work environment, changed various working conditions (length of breaks, lighting, etc.) measuring performance after each change. After an initial improvement in work performance with the first change, the new higher performance continued with each subsequent change including surprisingly a change back to the original conditions. What Hawthorne managers had discovered is that the motivating factor driving the performance increase was that the workers knew their performance data was being measured and recorded. The effect is now known in Sociology as the Hawthorne effect. Nike is capitalizing on this effect which seems to have a particularly strong influence on athletes and fitness buffs.

I can personally attest to the motivating effect of competition and knowing that I am or will be measured. › Continue reading

EIM Solutions Resist Commoditization with Supplementary Features

Friday, June 5th, 2009 | EIM, SPM | No Comments

What are the standard features of an enterprise incentive management (EIM) software package? David Kelly discusses this difficult question in an insightful recent post on his blog. Kelly points out the ambiguity of the EIM solution relative to the standardized feature set present in general ledger solutions. This is certainly true but is it necessarily a negative? I’m not sure. Of course it is definitely a bad situation if the customer is expecting one thing and does not get it or gets something undesired. Additionally, difficult system delivery issues can arise if functionality confusion causes implementation project scope growth. However, these things can and should be managed by proper pre-sale vendor product evaluation and post-sale system integration. That we don’t have 15 EIM vendor software solutions with the exact same feature set is a good thing. Sure, certain features (plan calculations, audit support, reporting) should be addressed by all packages, but supplementary features are allowing vendors to differentiate themselves and resist the move towards commoditization that has occurred with, for example, G/L packages.
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Recession Coming to a Close

Friday, May 29th, 2009 | Compensation Plans, SPM | 1 Comment

Going into the weekend, I wanted to share some bright news I noticed this week. Evidently a team of leading economists from the National Association of Business Economists (NABE) have predicted an end of the recession to come in 2009. Yes, that’s this year!

The NABE panel does temper the enthusiasm of the report saying that the predicted recovery will be “more moderate than is typical following a severe downturn”. Still, to those of us in the sales performance industry that have consistently seen companies’ attainment versus quota numbers way down, it’s refreshing to see a (somewhat) bright forecast.

A late 2009 recovery is definitely something to keep in mind when considering your 2010 plan changes and quotas. Of course, depending on your industry and its tendency to lead or lag, your mileage may vary. Hopefully upward activity will be contagious in the same way that things snowballed on the way down.

-Michael Stus

Coaching with MBOs during Periods of Revenue Decline

Tuesday, May 26th, 2009 | Callidus, Compensation Plans, EIM | No Comments

In industries particularly hard hit by the struggling economy, even the best sales representatives may appear to be under performing based on the most important sales objective, the sales revenue target. How do you know if sales personnel are doing their jobs when their corporate customers’ budget freezes don’t allow for deals to close? Good sales reps will continue with the proven processes that under normal circumstances allow for them to exceed revenue targets — practices like scheduled check-ins with existing accounts, accurate and timely CRM record keeping, deal / budget qualification, etc. Attention to these items, should allow your sales reps to be first out of the gate when budgets free up and money starts flowing again.
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