Conference ilbbak::us_sales_service

    Geez, here we go again. If we are going to go commission, have you
    created focus groups in the field and gotten feedback? It seems
    incredible to me that with Digital in such a state of flux that we
    would even attempt to embark on a plan like this. 
    
    In these days of value pricing, what value does commission selling
    bring?
    
    I am not a salesperson. I suspect that this rumor grows out of Ken's
    insistence on salaried salespeople to make sure the "right thing" was
    done. 
    
    In my opinion, we should construct commissions as an add-on to current
    salaries to encourage the sale of high-margin items such as software or
    services. Given the almost non-existant margin on hardware, commissions
    on total sales would seem to possibly increase revenue, but would
    probably have a great deal of impact on profitability. 
    
    Unless a business case can be presented which shows that commissions
    increase PROFITS, hold it in abeyance until we turn profitable. If you
    can't do that, hold off until things calm down a little

    Digital doesn't have systems in place that could come close
    to accurately tracking and paying commissions. Try to do it without
    good systems and you open a can of worms and probably a few law suits.
    

Well it looks like it won't be a real commission plan, but the $64,000 Question
is:  What will it be?  

Here is is Q2 and nobody has a clue what the plan is.  In fact, I haven't seen
my budget on a goal sheet yet.  What a company!

Bob

PS - Notice how Z's memo made a point of saying "sales managers" participated
in the process?  I wonder if we should be comforted by that?

    I would guess that since most of the sales managers have never been on
    a comp plan (having been promoted within), we are in trouble.
    
    Ken

    Our AGM was on the advisory group for the new plan, at one time was a
    rep and manager for IBM, and knows quite well what incentive plans can
    be like.
    
    Let's wait to see what comes out first before we start shooting holes
    in it!

>>    Let's wait to see what comes out first before we start shooting holes
>>    in it!


Well, any word yet?  This was SUPPOSED to be announced to the AGMs last week,
and to the rest of us today.  

Bob

    Our AGM announced today that the package was sent out to him towards
    the end of last week.
    
    I would expect the real message to happen this week.
    
    Art

I've seen some preliminary info, and the plan seems like a re-hash of last 
year's, except for the SCA.

Highlights:
		- loss of 10% salary, earned back by making budget
			this starts 1/1/93, with full credit
			for business booked before 1/1/93
		- no SCA-type bonus for booking business early in FY93
		- increased SPA-type of bonus, with a max of $50k
		- accelerated SPA per-percentage "points", starting at 
			$200 per point - depends on budget and Acct Group 
			results

Full details should be widely distributed ov the next week or so.

I'll save my comments till then.

Bob

SCA was the Sales Consistency Award.  $$ for being 100% YTD during the entire
year.

SPA is/was Sales Performance Award.  $$ for being over budget at the end of 
the FY.  (nee SP2)

    

    re. .10
    
    There were 2 major compensation programs in FY92 for Sales representatives:
      SCA = Sales Consistency Award
      SPC = Sales Performance Compensation (aka SP2)
    
    The major compensation program in FY92 for Sales management was:
      SMC = Sales Management Compensation (aka SP2)
    
    In FY93 the Compensation program line-up defined at this time will be:
      PPI = Personal Performance Incentive (for reps and managers)
      SPI = Sales Performance Incentive (aka SPC; for reps)
    
    Policies, procedures and information for the FY93 programs is currently
    being distributed.  The programs have changed sufficiently between FY92
    and FY93 that I would recommend reading the official documentation from
    your management team.    
    

I've had some time to think about this new plan and find it positive in 
some respects, lacking in others.

First, sales is supposed to be a risk-reward profession.  This has not
been true at DEC in the past, so a potential 10% loss of "salary" will
come as a shock to many of us.  This is good.  We need to be shaken up
a bit, in my opinion.  What's also good is the new SP2, SPC or whatever
they want to call it.  $50k potential with an accelerated per/point value
ranging from $200 to $300 is nice, though one has to be seriously over
budget to max this out.  What's also good is the recognition that 
different budget values demand different rewards.

What I don't like about this plan is that it doesn't drive any different
behavior in the sales force than previous plans.  Everything is linked
to pure dollars certed/revenue versus budget.  So $1M in PC sales is
still rewarded the same as $1M in SI consulting.  What also bothers me is 
that there is no upside reward for booking business early in this FY.  So,
those who catch up to budget in December are rewarded the same as those who
booked business early in the year. 

Finally, I still have a real problem with the way budgets are assigned.  In
my case I was told in June not even to think about FY93 business, just 
concentrate on FY92.  Then I was hit with a budget that I didn't even have
the opportunity to participate in formulating.  On top of that, Zereski
had apparantly saddled the field with even higher budgets before he left.
There HAS to be a better way to assign budgets.  In the past the only downside
in improper budgeting was no DEC100/COE/SPA.  Now it's a potential 10% loss
in income, and I imagine this will increase to 20 and 30% over time.

I truly hope that we get sales organization leader who understands what
this company wants us to do, and has the gumption to give us a compensation
plan that both drives this behavior and reasonably rewards the successful
sales rep.


Bob

    I am currently in sales support and am contemplating a move into sales. 
    Under this new plan, will I automatically be subject to a 10% cut in
    pay, if I cahnge my job code before Jan.1?
    
    Who is the right person to talk to get get a definitive answer on
    this??
    
    Thanks,
    
    Dalip

Re-1

Well, I'd speak to your prospective Account Set or Account Group Manager.

Since you'd be in Sales for less than the full FY, you may not be eligible
for the bonus, so you may not be subject to the 10% cut either.

Bob

Re .13: In the Xerox Account Group, us Sales Support types were offered the 
opportunity of moving to a Sales job code and sharing in the following:

	1. Ability to carry a personal sales budget

	2. Ability to take 10% cut in pay (escrowed)

	3. Ability to make up to $50K over base salary


Currently, my PPP has the Xerox U.S.-wide budget number since I'm a resource 
to the whole U.S. Xerox team. I like it that way. The other Sales Support 
person, who actually had taken on a personal sales budget, decided to stay in 
Support after they announced this incentive program half-way through the 
year...

Regards,

Jim

Well, it appears as though the "incentive" plan will not go into effect as
planned on 1/1/93.  At least there's strong rumors.  However, what plan are 
we working on??  I assume that we'll revert back to FY92's plan (minus the SCA 
of course).  The bigger SPI or SPA or SP2 or whatever was being funded by the
salary cuts.

Is there anyone in charge of this asylum??


Bob

Well, there's been no official word, one way or the other, on the new plan.

Sigh, I guess it's too much to expect management to communicate with us.
After all, nobody asked how the loss of the RSS would impact the field.

    
    From the Friday January 1, 1993 Washington Post.
    
    
    	" Digital, the only major computer maker that doesn't compensate
    its sales force by commission, said it will delay for six months an
    incentive-based pay program for sales representatives. A spokesman said
    the program will begin July 1 and, until then, Digital will track sales
    performance to show its staff what the effect of the planned change
    will be."
    
    Without permission.
    
    				fred deady

Yep, it's officially delayed.  Yet we still don't know what plans, if any, 
there are for bonus this year.  Do we assume that it's the same as last year?
Other than the SCA, of course.

And while we're at it, is there any hope that the plan for next year will
be a bit more realistic?

Bob

You may have already seen this. It was printed in today's version of
Digital Today which is distributed to buildings around Maynard. It is
probably also sent to the field but arrives there later.
---------------------------------------------------------------------

Portion of FY93 Sales Incentive Plan to be deferred

  Marlboro, Mass -- In response to concerns from sales people, the 
U.S. will be deferring the planned salary reduction portion of the
FY93 Sales Incentive Plan.
  While the plan concepts have received many favorable reviews, 
concerns were raised about elements that impact the company's 
ability to implement the plan as designed. Those concerns included
organizational and assignment changes, systems readiness, and the
finalization of budgets.
  The basic structure of the plans will remain unchanged. The Personal
Performance Incentive (PPI) plan will be run on a shadow basis during
Q3 and Q4 of FY93. The additional six months will allow for testing
of the systems and the preparation of FY94 sales goals. During this 
time, sales representatives and managers will receive actual reports
illustrating what they would have earned under such a plan.
  The Sales Performance Incentive (PPI) portion of the plan will be 
implemented, with minor revisions. The dollar amounts associated with 
the over budget percentage performance will remain the same -- with 
sales people receiving from $200 to $260 per percentage point achieved
over budget. 
  The maximum SPI pay out will be $20,000, and the Account Group Growth
Adder will be eliminated. In addition, early in Q3, a Target Incentive
Program will be announced. The program will provide for additional
compensation around particular products and services where the U.S. would
like to see increased focus. Detailed information with regards to the
plan will be available shortly.

--------------------------------------
Article Courtesy of U.S. Communications