Sales Compensation Management
Organizations must be able to successfully design, implement, manage, evaluate, and adapt sales compensation plans to provide direction and motivation to salespeople and reinforce desired sales behaviors.
Without well-designed plans and effective processes to manage incentive compensation, rewards, and bonuses, companies often struggle with frequent plan adjustments and exceptions, high administrative costs, and delayed or inaccurate payments that lead to frustration among salespeople, lack of motivation, and excessive turnover.
Challenges
When organizations poorly manage sales compensation, they may face the following common challenges:
- strategic misalignment because of an inability to effectively implement and manage desired sales compensation plans
- misunderstood plans that cause salespeople to misinterpret their performance and what they need to do to succeed
- errors in results due to manual and inconsistent validation of sales compensation data and calculations
- lack of information to make strategic decisions due to an inability to effectively provide sales management with critical sales performance information
- inability to adapt as a result of inflexible systems and a failure to recognize when changes to plans and processes are necessary
- process inconsistency that exacerbates all of the other problems and causes further errors and delays
Capabilities
To overcome these sales compensation management challenges, companies need the ability to:
- design, model, and implement sales compensation plans that are aligned with organizational goals and strategy
- design, produce, and deliver understandable incentive compensation, reward program, and bonus information to salespeople to drive and reinforce desired behaviors
- identify, correct, and prevent recurring errors in data, calculations, and reports
- deliver clear, meaningful, and timely sales compensation information to sales managers and executives to help them make more informed decisions
- quickly and accurately respond to desired changes to data, plans, reports, and workflows
- centrally manage all sales compensation plans by applying best practices in process automation and change management
