Conference 7.286::digital

    
    In general, the day after they take away your Plan A car, they also
    take away 10% of your weekly salary.  You get it back if you make 100%
    of your budget, but it is still a take away.  Your ability to
    participate in ESPP is reduced by 10%, and if you transfer out of a
    sales coded job, you do NOT go back to your previous base.
    
    The big payback comes at around 150 to 200% budget attainment, where
    you start making more than before, but this will have little relevance
    for most people.  The plan is an incentive for over-achievers; everyone
    else must work to break even.  Breaking even is hardly the prize one
    would hope for in an incentive plan.  
    
    It's difficult to criticize the switch to performance based pay for
    sales; in fact, it has been too long coming.  On the other hand, the
    tone of the presentation was less than positive, and coming on the
    heels of the great car take-away, it presents a very discouraging
    picture.

    its yet another 'stomp on sales' move by people who really do
    not understand sales and sales compensation - the really sorry
    thing is that the reps in my office (I'm in sales support) have 
    yet to get concrete budgets/account assignments - we're going to
    drive what good sales people we have left to our competitors.
    
    p.s. know what the UNISYS's rep's budget in our area is??
    1.5 million
    What will he make from comission on this?  75-80k, if he exceeds
    it, he'll make much more, our reps are expecting 2.5-3 mil budgets.
    
    go figure....  gotta pay for that non-revenue generating overhead
    I guess...

    ... 16 years ago I had an offer from Digital Equipment Corporation and
    one from Hewlett Packard Corporation.  Both fine corporations and both
    have good products.  I elected to join Digital due to the lack of any
    so-called "commission" plan.  Now, I hear the words "commission" being
    used and have mixed emotions.

    Given that I could be "turned loose" to  S-E-L-L  I think that my past
    reservations would be effectively be laid to rest.  However, there are
    still large corporations within 100 yards of my desk that I cannot sell
    to because they're "corporate accounts".

    Now comes the "budget" phase ... a portion of my budget is proposed for
    sales into a certain account.  I do some investigation:
    		
    	(1) This account is in the midst of significant downsizing.
    
    	(2) This account has not purchased any DEC hardware/software
    	    or services in two years.
    
    	(3) This account has told me that they will not be purchasing
            any hardware/software/services this year due to the downsizing
    	    and the fact that all of their purchasing has been moved to
    	    another state.
    
    	(4) This account has historically received "hand-me-down" from
            other sites and since other sites are downsizing this site will
    	    be the recipient of displaced hardware.

    Well, that's of no consequence - there will be a budget assigned to me
    for this account .. oh and .. you'll loose 10% of your base salary.

    Perhaps there's some things on the horizon which I am simply not privy
    to .. I try desperately to keep the faith ... desperately .. there's 16
    years of my life invested in this company - all of it in sales.  All is
    want to do is sell.  It hurts like hell when I'm told that I can't sell
    to people who want to buy and have to sell to people who can't buy.

    We'll see ...

    Jerry

>>    its yet another 'stomp on sales' move by people who really do
>>    not understand sales and sales compensation - the really sorry
>>    thing is that the reps in my office (I'm in sales support) have 
>>    yet to get concrete budgets/account assignments - we're going to
>>    drive what good sales people we have left to our competitors.
  
I'm in sales and am generally positive about the plan, this quote is
absolutely on target.  We are being forced to march to budgets that
were arbitrarily assigned and generally have no basis in reality.  In
fact, I understand Zareski imposed additional budget on the field because 
his own numbers were coming up short.  

No one in Sales that I have talked to is very motivated by the new 
compensation program. The Sales Support people in our Account Group were given
the option of moving to a Sales Job code and sharing in the rewards. Needless
to say, none of us made the move.

Regards,

Jim
Sales Support and happy to be there.

    .5> The Sales Support people in our Account Group were given the
    .5> option of moving to a Sales Job code and sharing in the rewards.
    .5> Needless to say, none of us made the move.
    
    If possible .. could you share any "reasons" that were given?
    
    Bubba

    This is not a commission plan....that was clearly stated and is
    obiviously true.  
    
    What it is, I have no idea.   Could be a ploy for wall street..sure
    will reduce expenses in January.  Could be something for the sake of
    doing something...
    
    It aint motivating any sales people I know....
    
    

    
    As I said in .1, there is nothing intrinsically wrong with moving the
    sales force to an incentive based pay plan.  In fact, we are late in
    doing it.  
    
    The problem occurs when you execute the plan during a down cycle, so
    that the take-back of pay appears punitive.  This is compounded by
    other take-back events, such as the car plan, health benefits plan, ltd
    price hike, etc.  Each event by itself is hardly worth crying about,
    but altogether, they represent a serious degradation in compensation. 
    They also signal an apparent lack of confidence in our ability to
    pull out of this slump.
    
    The results you would expect from the sales force are:
    		1.  Voluntary Attrition- which could very well be the point
    of all these actions.
    		2.  Capitulation- everyone who decides to stay resigns
    him/herself to the loss of income/benefits, and goes into a kind of
    wait and see mode until circumstances improve or deteriorate.  This is
    what the vast majority of people are going to do.  This does not
    represent "(positively) incented behavior" in the sales force.  
     
    The shame of this is that it could have been handled much better, and
    toward a positive end.  We could have announced that instead of a
    merit pay raise this year, sales would receive the ability to make
    incentive dollars for achieving and exceeding their budgets.  This could
    have been done for several years running, eventually yielding the
    desired percent mix of base pay and commissions.  This is not a new
    idea; it is how AT&T moved their sales force from full salary to
    70% base/30% commissions in only 3 years.
                                

We (sales support) were invited to attend the incentive compensation meeting
with the reps because it would probably be implemented for us 6 months after
sales.  Has anybody else heard this?  

Afterwards, we asked how they were going to do this and they didn't know.  The
only way now is to give us the districts total number as our budget since sales
support is not budgeted (except by PPP goals).  This is just speculation though.  

I guess we'll wait and see (since we are usually the last to know).


kevin

    
    
    This years "incentive plan" is obviously not a commission plan. But
    the future plan of 50/50 will certainly be. Lot's of good peddlar's
    will leave due to crappy accounts, high quotas (not budgets), etc.
    
    What hurt's a little is the stock purchase iplan s based soley on base
    salary. Also, when we do get to 50/50, if they don't offer guarantees,
    only the rep's with solid account base will be smiling. Most other
    cmpanies are base plus commission, but they alwasys add a draw so they
    can attract talent. When 50/50 comes the DEC sales force will not be
    the stable one it is today. (perhaps that is not so bad)
    
    A peddlar in NY.

    I get tired of all the complex theorizing about what a new plan
    is supposed to mean.  It seems to me that the new sales
    incentive plan is supposed to provide strong incentive for
    successful sales reps and mild disincentive for unsuccessful
    sales reps.  It looks like this plan will do just that.
    
    This new plan doesn't solve the age old problems of being given
    accounts that won't be buying anything this year.  It's not
    intended to solve this problem.
    
    I can't help but think that with a much smaller sales force we're
    going to have to learn to better qualify the business we work
    on.  Some of us may have to teach this to our managers.

As I understand it this plan applies only to this FY.  There will be
several plans next year to accomodate the vast differences in territory
assignments and budgets.

Then again, this is Digital and nothing would suprise me.


Bob

    Are Sales Managers getting the same "incentive Program"  i.e. loosing 
    10% of thier pay as of Jan 1?

    
    According to the taped presentation, sales management compensation is
    yet to be determined.  It was not made clear whether this meant that
    they will or will not start their pay penalty on Jan. 1 like the rest
    of us.

    
    Re: Budgets & Lousy Account Assignments.
    
    It never ceases to amaze me how our sales management overlooks the
    basics.
    
    Why not put together some incentives to make our "sales" people call
    on people who have never bought from DEC before?  Any fool can take 
    orders from an established customer.  Having sales folk waste their
    time trying to squeeze blood from a stone is just plain stupid.
    
    Prize money or double credit for orders taken from new accounts.
    If we deliver, it means repeat business.
    
    Digital "sales" is too often equated with account management.  A real
    salesperson prospects every single day and is forever looking for new
    customers.  Too bad Digital has so few real salespeople.
    
    my $.02
    
    -Ed     

Re -1

Amen, brother.  It never ceases to amaze me that I'm measured the same for
selling $X in low margin hardware to an existing customer as I would for
selling $X in high-margin SI, or $X to a NEW customer.  Same dollars,
same measurement/compensation, vastly different value to DEC.

So what does the typical sales rep do?  Whatever's the easiest to sell, with
the maximum total revenue to DEC, regardless of margin or profit.

Bob

��       <<< Note 2181.7 by POCUS::RICCIARDI "Be a graceful Parvenu..." >>>

��    This is not a commission plan....that was clearly stated and is
��    obiviously true.  
��    
��    What it is, I have no idea.   Could be a ploy for wall street..sure

    It is, of course, an attrition program.

	re .17:

>Amen, brother.  It never ceases to amaze me that I'm measured the same for
>selling $X in low margin hardware to an existing customer as I would for
>selling $X in high-margin SI, or $X to a NEW customer.  Same dollars,
>same measurement/compensation, vastly different value to DEC.

	And then, of course, you get the people who talk about "account
	control". To me, this is like using highly obscene swearwords.
	Sure, the customers might not hear us doing it - but then again
	one day they might.

	January 1988 Jack Shields sent out a memo to "all Sales
	Representatives", which began

	"The dictionary defines ARROGANCE as a feeling of superiority
	manifested in an overbearing manner or presumptuous claims.
	COMPLACENCY is defined as self-satisfaction accompanied by
	unawareness of actual dangers or deficiencies..."

	You can imagine how Shields' letter continued. To me, it was one
	of the better contributions I have seen from "top" management.

	Obviously, there is no such thing as "account control", and anyone
	who thinks he has it is exhibiting ARROGANCE and COMPLACENCY - which
	two habits are largely responsible for putting us where we are today.

	/Tom

    I am currently in sales support and have been contemplating a change to
    sales.  When I heard about this new compensation plan a while ago, I
    and the AGM decided to wait for the details to come out before I did
    anything.  If I move into sales before Jan. 1 , do I also have to give
    up 10% of my salary.  Or, am I exempt because I have not been part of
    the salary structure where supposedly part of the salary was in lieu of
    a commission and it is that part that is being taken away(supposedly!).
    
    Is the answer different if I make the switch after Jan.1??  Who can I
    call to get some kind of definitive authoratative answer??
    
    Any help/suggestions/comments would be appreciated.
    
    Dalip

    Re. .20
    
    Since there is only 6 mos. to go we are only required to give up 5%.
    
    Ken

re                     <<< Note 2181.21 by RIPPLE::CORBETTKE >>>

    
>    Since there is only 6 mos. to go we are only required to give up 5%.

Well, I guess it depends on how you count.  It is 10% of the following 6 
months salary, or 5% of your yearly salary.  Personally, when they take 10% 
out of my paycheck I assume it is a 10% giveback.

Does anyone yet know how we earn the money back?  Do we have to get 100% of 
year to date to get back to 100%, or does it look like a draw where at 100% 
YTD you are getting more than your original salary?  If I am at 95% of my 
yearly quota, do I get more than my 10% back?

I actually have a 3 part quota; a revenue number, a unit number, and a 
requirement to sign up 2 OEMs for a particular product.  If I am blowing 
through two of those goals and trailing on 1 does that mean I am ahead or 
behind?  Does it matter that I am doing well on revenue but trailing on 
units?

Am I the only one with simple questions that can not get answers from sales 
admin?  For those you will say 'talk to you manager', I did, and he also 
can not get any answers from sales admin.  BTW, he is an AGM.

matt

    
    re: .21
    
    I don't know about your yearly salary, but mine starts on January 1,
    and starting on that date, my paycheck and many of my benefits will be
    10% less than they are now.  At the end of next tax year, my w-2 form
    will reflect approximately $2500 less of taxable compensation because 
    of the loss of my car AND, potentially, 10% less salary.  I am the 
    account manager of a company which has implemented a UNIX-only strategy, 
    and has ruled out our Ultrix hardware because of a demonstrated 
    price/performance problem.  In addition, they have severely reduced 
    spending on IS hardware and software.  These are not selling issues, 
    they are product deficiencies and business circumstances.  They are 
    a few of the reasons that DEC kept its sales force on salary in the past.
    
    A 5% salary reduction reduces your weekly paycheck by 5%; a 10%
    reduction reduces your check by 10%.  Trying to represent a 10%
    reduction as anything else is misrepresentation.  By the same token, if
    you get a company car today and you don't get one next year, this
    represents a loss of benefits.  I am not saying that an employer can't
    change its car policy, or its compensation package.  I am just offended 
    at the flippant attempts to claim that these are not lost compensation, 
    or that a 10% reduction is only 5% because it starts in mid fiscal year.

RE: .21 and .23

There is no one in by district that believes that the give back is 5%. Everyone
believes it is 10%.  Management can say 5% all they want to.  The message is not
changing anyone's mind.

I have a proposal for all the 5 percenters...

Let's say that the average rep has been with DEC for 5 years...

a 10% cut for 6 months is a cut for only 10% of their tenure at DEC...

Therefore, it's really a 1% cut...  So why is everyone complaining...

If you are going to redefine the English language and modern mathematices why 
not do it all the way!!!!!

The bottom line is this...

When management chooses to redifine words in the English language you have to
wonder what language they are speaking and you have to question the meaning of
every other word they use.  When they say red do they mean red?

For example, in Tormey Chanpagne's video tape he said several times that this is
not a take back.  Everyone in the room believes it is a take back so who's 
definition is right?

Also, if people insist on calling it 5% when everyone believes it is 10% what
mathematics are they using?

If I can't rely on management using words like 5% and give back right correctly, 
do I have to have them define every single word they use.  I'm thinking of workds 
like...

This is not an attrition program  (Who's attrition, what does attrition mean)

This is meant to incent sales (incent sales to do what, sell more?, leave?)

In the videotape, Tormey also stated that the Digital's compensation was about the
same as our competitors (who are our competitors?, Is the compensation for sales
the same, sales management, janitors, or the average of everyone?)

Tormey also stated that Digital's yield per sales rep was the lowest in the 
industry.  How was this computed?  Does this include Tormey's salary? 
Does this include corporate overhead? Do our competitors numbers include 
corporate overhead?

When I can't trust someone on their basic definition on 5%, how can I trust 
them on something as important as our yield per rep?!?!?!

The moral of the story is...

Call a spade a spade so I can trust the rest of what you say

Ken Slattery

    re: -1  Ken S.
    
    Thank you for better articulating my complaint.  As you say, the real
    problem here isn't the benefit reduction, so much as the breakdown of
    faith and trust in management caused by their unwillingness to call a
    spade a spade.  Had they come right out and admitted that we needed to
    reduce sales salaries by 10% to stay competitive, that would have been
    more acceptable (to me at least) because it would have been honest and
    straight forward.  Instead, they cooked up schemes to affect the same
    cost savings while attempting to hide the real purpose.  Now we have a
    credibility problem with our management.  

>This is meant to incent sales (incent sales to do what, sell more?, leave?)

Perhaps you misheard.  My dictionary doesn't list "incent".
On the other hand, it does list "incense" as a verb, meaning "to enrage".

The 10% reduction in base can be easily recovered by closing business.

When you reach 40% of your budget, you get an amount equal to 1% of your yearly
base pay.   You get another 1% when you achieve 50%, 70%, 80%, 90%, and 100%.
(No pay for 60%)

For every 1% above 100% you get between $200 and $260 per % point. (Based on how
large a budget you had to begin with...larger budgets get more per % point.)

Therefore, if you make your number, you will actually make more for FY93 than
you would have without the plan.

If you exceed your number, you have significant upside potential.

You will only lose 10% of your yearly income (5% for FY93) if you are less than
40% of your goal.  

People at less than 40% of budget in other companies are usually on the street.

The more pressing issue is not the plan, but Digital's ability to implement it.
Our systems are not capable of accurately tracking this information.  Nor is our
management capable of determining equitable and fair budgets (or even getting it
close).   We are in week 19 of the fiscal year, and many people still do not have
their final budget goals.

In the end, it is likely that there will be a significant increase in sales time
focused on internal tracking of certs, which reduces the amount of time that
sales can spend on the streets.

Finally, it seems to me that Digital's problem is profit, not revenue.  (Revenue
was up 1% last quarter.)   Yet the sales goals are still certs/revenue oriented.
If the sales teams were measured on MARGIN rather than CERTS, we would return to 
profitability more quickly, and we would promote the selling behavior that 
will keep Digital healthy.   Sales of low margin products will flow through
channels, and the sales force would be focused on the high margin, value-
added solutions which make us unique.

This compensation plan is not perfect, but it is a reasonable first step.  I 
believe it will help to precipitate the changes required in the administrative
systems, with a minimum impact on the sales force.   Once the budgeting and
tracking issues are resolved, I would expect a much more aggressive compensation
plan, moving toward a 70%/30% mix, based on margin, which is more in line with
the rest of the industry.

My $.02 (Less 5 to 10%)    8^)

Bob

    Bob,
    
    Your comments on budgets hit the nail on the head.  My wife worked in
    sales for nearly 20 years, with compensation plans that provided as
    little as 30% of projected grosspay as salary.  In all cases, budgets
    were set to allow the vast majority of the sales force to "make their
    numbers" and thus earn in accordance with their expectations.
    
    This company is one where you get an award for simply making quota. 
    Unless budgets are brought within reach, the plan is nothing more than
    a salary reduction.  A constantly unatainable goal isn't an incentive,
    it's a bad joke.
    
    \dave

re       <<< Note 2181.27 by SYORPD::DEEP "Bob Deep - SYO, DTN 256-5708" >>>

>The 10% reduction in base can be easily recovered by closing business.

I'm glad you know how easy business is these days.

>When you reach 40% of your budget, you get an amount equal to 1% of your yearly
>base pay.   You get another 1% when you achieve 50%, 70%, 80%, 90%, and 100%.
>(No pay for 60%)

>For every 1% above 100% you get between $200 and $260 per % point. (Based on how
>large a budget you had to begin with...larger budgets get more per % point.)

>Therefore, if you make your number, you will actually make more for FY93 than
>you would have without the plan.

I guess I am missing something, if at 100% of quota I get 5% of my salary 
after DEC took back 5% how will I actually be making more for FY93?  Is 
this a published plan?  How can I get my boss (oops, manager a copy)?

Is the $200 through $260 per % point calculation published anywhere?

>If you exceed your number, you have significant upside potential.

This part I like, I have always exceeded my budget is sales for DEC and 
other companies.

>You will only lose 10% of your yearly income (5% for FY93) if you are less than
>40% of your goal.  

This is very generous in theory, it is the practise that worries some 
people.  DEC has proven through time honored tradition that it has no 
ability to generate top down or bottom up sales forecasts.  With poor 
forecasts determining sales coverage there will be poor compensation by 
definition.

>People at less than 40% of budget in other companies are usually on the street.

I would normally agree, as long as any manager with more than 1 of these is 
on the street first.

>Finally, it seems to me that Digital's problem is profit, not revenue.  (Revenue
>was up 1% last quarter.)   Yet the sales goals are still certs/revenue oriented.
>If the sales teams were measured on MARGIN rather than CERTS, we would return to 
>profitability more quickly, and we would promote the selling behavior that 
>will keep Digital healthy.   Sales of low margin products will flow through
>channels, and the sales force would be focused on the high margin, value-
>added solutions which make us unique.

Perhaps putting marketing on a reward system where we set corporate goals 
on profit, market share, revenue, and growth in each of these and the 
better marketing groups get better rewards.  If nobody will require the 
product (i.e. nobody is willing to take a marketing job for a product) then 
shut down the engineering group responsible for that product.

>This compensation plan is not perfect, but it is a reasonable first step.  I 
>believe it will help to precipitate the changes required in the administrative
>systems, with a minimum impact on the sales force.   Once the budgeting and
>tracking issues are resolved, I would expect a much more aggressive compensation
>plan, moving toward a 70%/30% mix, based on margin, which is more in line with
>the rest of the industry.

I am concerned that by changing the rewards for a group of individual 
contributors some managers believe structural problems will be resolved.

Can I ask whether the numbers you quoted are published anywhere accessible 
to those of us affected but still ignorant?

Thanks,

matt

    re:  .27
    
    Your points are all well taken.  People who can't produce 40% of their
    goal do normally end up on the street.
    
    The problem is when the entire sales force is missing budget more often 
    than it is exceeding its quota.  There are lots of entire sales districts
    which will not make 40% of their quota this FY.  This is the reason for
    the uproar.  If you truly want to introduce an incentive plan that will
    get wide support, you roll it out in good times, at the beginning of a
    new fiscal year, when everyone is optimistic.  If you want to reduce
    sales costs, and you don't care what signals you send, then you cook up
    something like our new plan.
    
    Then you introduce it at midyear, with a salary takeback, and you put
    absolutely no effort into "selling" it to the affected population.  You
    just throw it out there and see what happens.  If you're REALLY
    insensitive, you schedule it on the heels of several other takebacks,
    like cars, health insurance, and LTD.
         

RE:  2181.29 

>>>When you reach 40% of your budget, you get an amount equal to 1% of your yearly
>>base pay.   You get another 1% when you achieve 50%, 70%, 80%, 90%, and 100%.
>>(No pay for 60%)

>>Therefore, if you make your number, you will actually make more for FY93 than>
>>you would have without the plan.

>I guess I am missing something, if at 100% of quota I get 5% of my salary 
>after DEC took back 5% how will I actually be making more for FY93?  Is 
>this a published plan?  How can I get my boss (oops, manager a copy)?

If you add it up, (1% each for 40,50,70,80,90,100% achievement of budget), you
actually earn 101% of your annual salary by being 100% of budget.


>I would normally agree, as long as any manager with more than 1 of these is 
>on the street first.

Amen to that!


Bob

RE: .27

>>The more pressing issue is not the plan, but Digital's ability to implement it.
>>Our systems are not capable of accurately tracking this information.  Nor is our
>>management capable of determining equitable and fair budgets (or even getting it
>>close).   We are in week 19 of the fiscal year, and many people still do not have
>>their final budget goals.

Bob

I've been asked to participate in a group that will review the systems that
will support this new plan, a Quality Review team if you will.  I too am
sceptical, but will keep an open mind until I actually see the reports, etc
later this month.  Believe me, I'm in sales and have a vested interest in
the accuracy of these new systems, as do you all.


Bob

    Matt Haley-- I have a copy of the comp plan with Q&A.  Come on by and
    get it from me if you do not have it.
    
    I have one basic problem with the plan.  We started a team four years
    ago to sell to an account that had 2 PDP11's and was a heavy Tandem and
    IBM user.  The management in the district called this an opportunity
    account and staffed it with some senior people.  We did not expect any
    revenue for at least 18-24 months.
    
    Our first revenue came in at month 14.
    
    Now, after 4 years on the account we have built it up to generating
    over $23,000,000.  I was over 400% two years ago and 166% last year. 
    We fully plan on exceeding out $9,000,000 quota this year.
    
    Under the current plan there is no way I would tackle such a challanging
    assignment.
    
    True, I could carry a lower quota but I doubt that management would be
    willing to do that or to give me a "bye" for 2 years.
    
    Apart from that I think the plan as is, is a good first step to getting
    to a more realistic plan that rewards achievers and allows the
    under-achievers to move somewhere else.
    
    

    If you are interested, I developed an EXCEL spreadsheet that models the
    effect of budget performance on PPI and SPI dollars for the sales reps
    in my account group.  It will show compensation and the timing thereof
    for FY93 (including SPI payments earned this year but paid next).
    
    The following caveats apply:
    
    1.  Although I welcome comments and suggestions, I am not going to
    provide support.  This was done as a special project for my account
    group and that's about as far as I'll promise to take it.
    
    2.  The worksheet is protected and parts are hidden. If someone really
    needs the password it will be provided, but see caveat #1.
    
    You will need the following two files:
    
    	ALOS01::PPIWKSHT.XLS  !The spreadsheet 
    	ALOS01::PPIWKSHT.TXT  !Instructions on how to use
    
    You'll need PATHWORKS or someone who has access to it in order to copy
    the files to your PC (or to a floppy for transfer to your PC).
    
    Enjoy.
    
    Al
    

    
    re: .33
    
    The issue of timing of revenue is exactly why I am so vocally opposed
    to this kind of plan.  The account I'm assigned to is in a 1-2 year 
    spending freeze.  In the recent past, though, they have been Digital's 
    first and third largest account (consecutive years). 
    
    Unfortunately, I came into the account team at the end of this cycle. 
    Now I get to take a salary hit purely because of timing.  Before I came
    into this district I used to go into new account territories (ZERO
    installed based, with nothing but a list of cold call accounts) and find
    multimillion dollar EIS projects.  I won three Decathlons in four years
    by converting IBM accounts to DEC using EIS projects.  Under the new pay
    structure I would NEVER agree to take a new account territory again,
    because during the selling cycle, I would be losing too much money
    (the anouncement clearly stated that the plan was to go to 50% base and
    50% incentive).
     
    The beauty of a salaried sales force is that you can assign resources
    where you need them.  You can invest in long term account strategies,
    and you can manage fairness with bonuses and with salary reviews.
    
    The downside is that you attract some people who are not motivated to 
    excel, and they tend to stay longer than they would with commissions. 
    This is a management problem, not a compensation problem.  It is best
    addressed by local managers in performance appraisals, not by trashing
    a system that has worked exceptionally well for thirty years.
                                                                   

The plan makes allowances for account building activities.   Area Managers
have the ability to exempt certain individuals from the variable compensation
program, presumably for exactly this purpose.

Also, the plan indicates that 50/50 compensation is simply one end of the 
range.  The script for the presentation states:

"Over time, the salary incentive mix will change from 90%/10% to a variety of 
plans where that salary/incentive mix is consistant with the selling assignment.
That mix can range from 50%/50% to 90%/10%."

I read that as saying that some people may be 50/50, and some will be 90/10 and
there will be other plans in between those, depending on your particular
account set.

If the system doesn't work, we should strive to change it.  But I would hesitate
to condemn a system that has yet to be implemented.  The only thing that is 
constant is change.  One thing's for sure... the current 100% salary system
doesn't work.

Bob

    
    I still say there needs to be a reason for someone to bang on 
    doors OUTSIDE his/her particular account assignments.
    
    Margins are going down and so are prices.  With all the hype about 
    Volume and NT and PCs, can't someone make the logical connection and
    tie compenstation to finding NEW business?
    
    Our customers are trying to cut expenses like we are.  They have less
    money to spend with Digital.  We need to *TAKE* business away from 
    our competitors.
    
    Calling on people who have been buying from us for years does not 
    achieve that goal.
    
    -Ed
    

RE -1

>>    I still say there needs to be a reason for someone to bang on 
>>    doors OUTSIDE his/her particular account assignments.
  
It all comes down to different metrics.  We can't afford to continue
measuring sales on pure certs.  It just doesn't make sense.  

The problem is nobody in DEC's hierarcy has sold.  They don't have a clue
as to how to motivate us, and probably don't even know what behavior they
want us to exhibit other than "sell DEC".

I sure as hell hope BP hires a pro.

Bob

    
    There is a rumor going around that the compensation plan may be put on
    hold until the new sales VP is onboard.  The rational is that the new
    person should have some input into salary issues.  This makes too much
    sense to be anything but a rumor, however.

    My cynical side imagines the architects of this compensation plan had 
    the following thoughts: "Revenue is flat...therefore sales isn't selling.
    ....sales isn't selling...therefore salespeople aren't motivated....
    salespeople aren't motivated....what will motivate them?....(lightbulb!)
    .....take back 10% of their pay (but don't call it a paycut)....
    give them more upside potential (but not really, let's rename the SP2 
    program to the SPI program and up the dollar amounts per % point over 
    budget, it won't cost us a whole lot more since we gave them all bigger
    budgets earlier this year anyway)....and let's make it sound real
    complicated so that they focus on the mechanics of this plan versus its
    real impact...yeah...."  Do we know what a red herring is? I think we
    do.
    
    My better half imagines that the true intent IS to incent sales to sell
    more.  The plan is a fine plan and it WILL motivate me to over-achieve,
    but not necessarily more than the old plan.  What would have motivated
    me more was if the architects spent the same effort and money to attack
    some root causes of why sales is flat.  I truly believe that Digital
    salespeople are selling harder than ever before and that there are more
    critical problems to solve than how we get compensated.  BTW: I wonder
    how much it'll cost DEC to administer this new comp. plan.
    
    Some final thoughts: How many fish can you catch in a pond with 5 fish when
    your manager wants you to catch 10?  How about when there are 10 other
    fishermans at the same pond? Using better bait than you?  
    
    DH 

It wouldn't suprise me in the least if they waited until 6/30/93 to give
me my FY93 budget and then tell me what I made for the year.

Bob

Qualification of .31

Small nit.

>>If you add it up, (1% each for 40,50,70,80,90,100% achievement of budget), you
>>actually earn 101% of your annual salary by being 100% of budget.

As I read the program, the 1% is calculated on the new, REDUCED salary, not
the original pre-10%-cut salary.  So, by making 100% of budget you make 100.4%
of your original salary, not 101%. 


Bob

    .42 is correct.
    
    Al
    

    Even more to the general point, in FY94, if you make 100% of budget,
    you will only make 95.4% of your CY92 salary. My guess is that average
    break-even is around 114% of budget (at $200 per 1% overachievement).
    
    Looks more like cost-cutting than incentive to me.
    
    - Andy -

>>    Even more to the general point, in FY94, if you make 100% of budget,
>>    you will only make 95.4% of your CY92 salary. My guess is that average
>>    break-even is around 114% of budget (at $200 per 1% overachievement).
  
Where did you get this info from?  You can't extrapolate from the FY93 plan
and project into FY94 and beyond.  There will be all new plans next year.

Someone returning from COE said that Bob Palmer was in attendance and got a 
standing ovation for stating something to the effect of "the problem with 
Digital is not the sales force and he was not too impressed with the new sales 
compensation program and is considering delaying/scrapping it."

Stay tuned...

One sure to de-motivate the sales force (or anybody for that matter) is to 
screw around with the comp plan, delay decisions and keep us hanging.  

Can't ANYBODY make a decision around here? I sure hope this isn't true.  On
the other hand, I hope a LOT more thought is put into next year's plan.

Bob

Well, here it is 12/10 and NOBODY has told us if this is on or off.  I guess
I have to wait till January to see if I get a 10% salary cut.

Boy, ya gotta wonder what the hell is going on in the puzzle palace.  Is 
anybody home?


Bob

So I heard, but I STILL haven't seen this in writing, from a member of 
management.  Or are they using NOTES as a communication medium these days?

It's coming.   First it goes from Top Most Management to Next Top Most
Management...sits in inbox until Next Top Most Management gets done with 
internal meeting regarding how to improve communication.  Then sent to 
Not Quite Next Top Most But Almost Next Top Most Management, who are working
on the action items that their boss accepted in the above mentioned meeting.
(Looks good to accept action items, even if you deligate the task)  Don't
worry, only 14 more layers to filter through.  (But we're not top heavy!)

Trickle...trickle...trickle...memo finds way into notes file.

From here, the Individual Contributors affected by the change quickly 
disseminate the information amongst themselves.

"Official Memo" through channels arrives some days (or weeks) later... usually
with all forwards attached, and meaningful value added comments like, "FYI..."
or "RE: Comp Plan..."

(sigh!)

Bob

Well put, Bob.  We share the same frustrations.

The other Bob

    .51 was so accurate I started to laugh......until my eyes filled up
    with tears.....and they weren't tears of joy :-(
    
    K
    

    re. .-1
    
    Karen,
    
    Yup! Bob pretty much hit it on the head. To quote the recently SERP'd
    out Dick Lennard:
    
          The death spiral continues.
    
    If you don't believe that. Wait till Monday.
    
    Gene (who saw LOTS of friends go this week - maybe more next)