As an example, we will give 3 main KPIs for a store of large and small household appliances. We are talking about product coverage, number of customers and sales amount.
Incorrect: set the same weight for all indicators. In this case, there is no point for the manager to sell refrigerators and washing machines when he can sell coffee machines and printers.
Correct: distribute KPI weights, for example, as follows: 70% - product coverage, 20% - number of clients served and 10% - sales amount. In this case, employees will try to sell some expensive equipment in large quantities to make a profit.
Transparency
Each employee should be moj databaseaware of what work and how much bonus they are entitled to, taking into account the recorded KPIs. Then this system will not become something scary for them.
If a company engaged in sales of goods has set the number of deals in the format of telephone negotiations as key indicators for managers, then:
It is wrong to record the number of transactions greater than some established threshold (for example, more than 20) and to reward for this. Employees who have concluded 30 transactions will be outraged by the same bonus as employees with 21 transactions per billing period.
The right decision on the part of the management would be to mark each fact of sale in the CRM and calculate how many transactions are needed to accrue a bonus. You can link the bonus amount to the percentage of excess of the plan. It turns out that each employee of the company will receive additional payment taking into account the efforts made.
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Binding to an employee
Before calculating the sales manager's KPI, it is necessary to create conditions under which the accrual or deprivation of a bonus depends solely on the work of a specific employee, and not on the team as a whole.
A manager's personal KPI cannot be linked to the overall sales volume. In this case, particularly diligent employees will not see motivation, because their bonus will be the same as that of their less efficient colleagues.
If in a workspace one employee is responsible for sending out informational letters to the client, and the second one is engaged in “finishing off” clients, then:
It is impossible to approve the number of closed deals as a KPI for both managers. The first employee will understand that his bonus depends only on the quality of the second one's work, which means he does not need to try especially hard.
You can set up a system where the first manager will be responsible for how many people read the letter and call the phone number specified in the message. His KPI will be the number of opened letters and calls.