Infosys is reinventing itself, creating a new strategy to retain talent. Know how

Choosing the right sales incentives to motivate a team can be challenging. While the incentives need to be exciting enough to motivate a sales force to change their behavior, they also need to fit within an organization’s budget. To satisfy its employees, and also to retain them, organizations keep coming up with new ideas and innovations around it. Some offer bonuses, some offer offsites and some offer incentives proportional to revenue generated.

Precisely this is what India’s second largest IT consulting firm Infosys plans to do. It is putting a new incentive structure in place to reward its sales superstars, two people directly familiar with the matter told the Economic Times.

The financial daily further revealed that for years, the software services company has used operating margins and overall growth of the company as key benchmarks to reward ace salesmen. Now, it is considering changes to its incentive structure to link compensation disproportionately, especially the ones that bring in large deals and help the company get more out of existing large customers. “Infy want to link incentives directly to incremental revenue generated,” one of them said.

The ET report also added that incremental revenue has become one of the most important benchmarks to track in India’s $146-billion IT industry as it reflects the competitive strength of a company and its ability to win new contracts. The second person told that for now, Infosys is still in the process of finalizing the way the new compensation metrics will be structured, but is keen to roll out the new pay structure sometime during FY15.

The reason behind rewarding its sales force as a unit is that the better the company performed, the higher is the variable payout for everyone, irrespective of the performance of individual accounts. As per the business daily, up to 60% of the variable payout is linked to profitability and revenue growth, while the rest of the variable component was linked to other parameters such as number of new logos, account receivables and number of new $100-million accounts.

The new incentive structure seeks to address that anomaly — top performers will be rewarded handsomely on basis of incremental revenue they generate from their individual accounts and new logos won, irrespective of the company’s overall performance, the ET report concluded. (Image: Infosys)