Simplifying Compensation Plan Administration

 

Compensation is one of the most difficult facets of a sales organization to manage. In large companies, it’s not just the often diverse compensation plans that complicate the practice, but global rep dispersion and their home currency play large parts as well. Companies are increasingly looking to compensation management tools for help consolidating and standardizing compensation for the entire sales force.

Exploring how companies use compensation tools was the purpose of our recent brief titled “Using Tools to Standardize Sales Compensation.” We brought the topic to three member organizations to see how their compensation management teams were using tools. We asked five main questions:

What is the high-level structure of your sales organization and compensation team?
What are the attributes of your sales compensation tool (vendor, access rights, payout currency)?
What has worked well with the compensation tool at your organization?
What are the challenges associated with the compensation tool at your organization?
Do you have any additional key considerations for instituting a compensation tool?

Two of the companies in our brief use the compensation tool Callidus while the other company uses Iconixx. Both of these tools provide a two-sided platform with visibility for both the compensation team and individual rep’s personal compensation plans. The uniform tool structure and customization possibilities helped the profiled companies to more easily facilitate compensation payment and adjustments.

However, when seeking to improve compensation efficiency, executives remarked that the company focus should be placed on organizational consolidation and simplification rather than tool usage. At each of the profiled companies, compensation tool installation was coupled with a sales structure change that served to align compensation plans and management strategies.

CEB Sales Members, check out the full report: Using Tools to Standardize Sales Compensation and use the profiles to compare your organizations’ compensation processes. Also, review the Compensation topic center to learn how to better design and communicate compensation plans.