shutterstock_106533593.jpgThe Olympics are the pinnacle of sport. Stories of hard work, sacrifice, striving and achievement captivate us all.

Fairness is another key theme in sports, of course, and this year’s Russian doping story highlights the importance of fairness at the Olympics: Officials do their best to test everything and ensure that nobody has an unfair advantage due to illegal substances or other means. An individual’s effort and abilities should be the only elements that impact the final outcome.

So it was with interest that I read a recent article on MSN suggesting that there was something about the pool configuration that gave swimmers in the higher-numbered lanes a slight advantage in the 50-meter race—an issue that flew under the radar compared to the substance abuse allegations. According to the MSN article, an ever-so-slight current gave swimmers in lanes 4 through 8 a tiny advantage that seemed to make a difference in the all-out, one-direction, 50-meter sprint. A group of scientists noticed, and now an investigation is under way. An issue with the way that the pool was set up may have cost somebody a medal.

With sales comp almost always on my mind, I read this article while thinking about sales team dynamics. If some salespeople have a current working in their favor while others must plow ahead on their own, it creates an unfair dynamic. A salesperson with a certain geography (think “Olympic swim lane”) shouldn’t have a better or worse chance of hitting and exceeding her quota. Performance against a quota determines a salesperson’s overall payout and, often, whether she qualifies for the annual trip reserved for the top performers in the nation. Giving someone an unfair swim lane could influence whether or not she’s deemed fit to stand on the winners’ podium.


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As such, companies need to conduct analytics to ensure that no aspect of a territory’s makeup unfairly influences a salesperson’s  performance against a quota. At a minimum, several factors should examined at a salesperson level to test for fairness, including total sales, total potential, workload, market share (if available), last year’s sales growth and the current year’s growth expectations. Recently, I was speaking with multiple salespeople at a client company, and they felt that the quota-setting process was “penalizing success” and wasn’t fair. Specifically, there was a perception in the field that if a sales rep overachieved his quota this year, then corporate would set an unachievable quota for him next year, so we tested this belief and found it to be spot on. The top one-third of achievers in 2015 (from a percent-to-quota standpoint) were actually below their 2016 quota (with a median performance of 97%), whereas the bottom one-third of achievers in 2015 were outperforming their counterparts from the top one-third in 2016 (with a median performance of 106%). This was counterintuitive and unfair. We implemented a revised quota-setting method to eliminate the “success penalty” and make the process much fairer.

Doing these kinds of analyses will ensure that winners are recognized for their true performance, not simply because they lucked into a certain swim lane.

 

Topics: fairness in sales compensation, Chad Albrecht, Olympics, fairness, swimming