Problems Surrounding Sales Compensation Management

Sales people have an inherent drive to earn as much money as possible through their incentive compensation plans.  Being that money is the main motivator and reason that sales people come to work on a daily basis, it is vital to execute the compensation management process as efficiently and accurately as possible.  Not only can compensation motivate sales to earn more money but, when used properly, it can also be used to drive selling behaviors ensuring that your sales people are selling in the manner you want them to.  However, if incentive compensation is not used properly big problems can ensue.

 

Using Compensation Management to Drive Sales Performance

 

In order to prevent circumvent some of the problems that can arise with incentive compensation, organizations should use an automated compensation management system.  By automating the system you can ensure that you are driving sales performance and gearing your incentives toward driving the behaviors that align with your overall company objectives.  An automated process will also make it so that you can quickly implement new incentives to drive the type of sales that make the most sense for your organization whether it be up-sell, cross-sell, new business acquisitions, or a new product line in order to drive sales to deliver on the results you need to be successful.

 

To further ensure that you are eliminating issues that might otherwise go unseen, it is crucial that you model any changes you are going to be making to incentives to see the impact the changes will have on sales reps, as well as on your compensation budget.  There isn’t a whole lot of things more demotivating than working extremely hard and seeing your commission shrink despite no fault of your own.  Modeling the changes will also allow you to ensure that you are continuing to positively impact performance.

 

How to Keep Sales Motivated by Avoiding Pitfalls

 

In order for any company to succeed in hitting their revenue targets they need to keep their sales people happy and motivated.  As such, motivation through compensation should be a major priority in driving sales performance and sales attainment.  Sales people are driven to work incredibly hard to close deals in order to earn as large of commissions as possible.  Problems of motivation can arise when sales doesn’t trust that their commissions are being paid accurately and fairly.  Fixing any issues with the accuracy of commission payouts will go a long way towards keeping sales people motivated, engaged, and eager to perform at a high level.  In today’s ever complex selling environments, it has become increasingly important to automate compensation management systems within sales organizations.  Keeping the complexity in check and maintaining a transparent, accurate structure will keep sales people motivated and bought-in to deliver the results that companies need in order to reach their revenue targets.  The more accurate and transparent the compensation system is the less time sales people will engage in unproductive shadow accounting that takes them away from their main priority, to sell more.