Defining a Performance Measurement Scope

Defining a Performance Measurement Scope


Incentive design step
This article is referenced by our incentive design guide as step #1.

The following choices are available to you:
  • Measure performance by individual
  • Measure performance by team / territory

In most cases, you want to measure performance by individual. You simply want to measure the individual performance of each representative, and grant rewards based on individual results. This is a safe default (and the most commonly used setting).

However, some organizations may want to measure performance collectively at the team / territory level because they:
    • Want to reward managers based on the collective performance of a team / territory
    • Have teams working in a highly collaborative manner (teams) to achieve sales results
    • Want to reward collective sales behaviors in addition to individual performance

    We'll walk you through both options.

    Measure performance by individual
    Choose this option for the following scenarios:
      1. Plan beneficiaries work in an individual manner to achieve sales results
      2. You DO want to measure the performance of individuals (ex: total revenue achieved by each sales representative)
      3. You do NOT want to measure the collective performance of teams / territories (ex: total revenue achieved by territories)
      4. If a sales transaction credits an individual, you want it to contribute to this individual's performance results
      5. If a sales transaction credits a team / territory, you want it to contribute to the performance of members of this team (ex: split rule)

      Assigning rewards
      Measuring performance by individuals does NOT mean you can only assign rewards to those individuals. Once individual performance has been assessed and rewards calculated, you will be able to choose whether you want to assign earned rewards to the individuals - or someone else, such as their manager, their team members, etc.

      Measure performance by team / territory
      Choose this option for the following scenarios:
        1. Plan beneficiaries work in a highly collaborative manner to achieve sales results
        2. You DO want to reward not just individual performance, but also collective sales performance
        3. You DO want to reward managers based on the collective sales performance of a team / territory
        4. If a sales transaction credits an individual, you want it to contribute to the individual's team / territory performance
        5. If a sales transaction credits a team / territory, you want it to contribute to this team's collective performance results

        Assigning rewards
        Measuring performance by teams / territories does not prevent you from assigning rewards to individuals. Once the team / territory's performance has been assessed and rewards calculated, you will be able to choose how to assign rewards - for example, splitting the reward between team members, rewarding a team's manager, etc.