Is an Incentive Compensation Management Solution Worth the Investment?

Top 5 Reasons to Consider Adopting ICM

Does your company provide commissions based on a basic percentage of sales? Have you considered adopting a more robust and customized automated incentive tracking solution to motivate your sales personnel? Incentive compensation management (ICM) solutions can offer your organization significant improvements from manually tracking your sales team’s pay for performance metrics on a spreadsheet. Here are some key elements to consider: 

1. Decrease Tracking and Payment Errors

Companies run the risk of either overpayment or underpayment through manual sales and referral tracking. Overpayment has the obvious downside of reducing potential profits. Your organization may not even catch the mistake. Underpayments can be equally problematic. Not only might they impact employee morale, but your sales personnel could spend more time mitigating their variable pay than working on an actual sale. With a structured incentive compensation management system, studies show these error types are reduced significantly. 

2. Establish a Clear Connection Between Company Objectives and Employee Performance

By customizing your sales compensation based upon what motivates your sales team and what is most relevant, organizations can gain greater efficiency through using incentive tracking solutions. Aligning performance management with company goals can drive the behaviors you want to see in your employees. As an executive responsible for the bottom line, incentive compensation management can provide greater flexibility in your plan design. It provides more confidence that your sales teams are pursuing the right initiatives (and products) to support overall company strategies. 

3. Deliver Reporting Visibility and Accuracy

Maintaining multiple spreadsheets often leaves a lot to be desired in terms of preparing and sharing meaningful reports to leadership. By implementing a robust performance management solution, incentive reporting not only becomes easier, but results are visible to all levels of the organization. Real-time, accurate data is made available on demand, and executives can easily monitor whether their strategies are staying on track. 

4. Improve Employee Retention

It is common practice to incentivize sales personnel with variable pay plans that reward their performance not just on the impact to the bottom line, but on other criteria/KPIs unique to each organization. With manually maintained spreadsheets that may not be shared across the organization, employees may question their performance bonus payments. Sales employees who feel they are earning the sales compensation they deserve are more likely to stay loyal to their organization. Varying reports indicate the average range of costs to replace a sales employee is $100,000-$125,000. Sales employees tend to have the highest rates of turnover. Can you really afford to further risk retention by not having a customized, transparent compensation management system in place? 

5. Provide Clear Auditing and Tracking Capabilities

In tightly controlled/highly regulated industries, companies may often need to provide detailed data to support corporate audits and regulatory exams. Without the benefit of a robust and secure sales tracking software, your company could be at risk. Imagine removing the pain of manually pulling requested reports from a complex spreadsheet and replacing that time-consuming task with a simple click of a button. By adopting a comprehensive performance management solution, you can save your company a lot of time and enjoy peace of mind knowing your software can support any audit request. 

There are many benefits in transitioning from manual spreadsheets to a fully automated incentive compensation management solution. Interested in learning how your organization could specifically benefit? Contact us at https://www.themotivator.com/support/ to learn more.