Steps to Building Compensation Systems that Work

Picture of Carrie Mohoric
Director, Professional Services

Have you ever met anyone who pursued a career in sales just for the joy of the close? It’s unlikely, when the satisfaction of a well-earned, well-thought out compensation system is what really counts. In the dark and distant past, every lead and transaction was noted in the ledger book while commission earned may have just been some figures scribbled on a bit of notepaper. More recently, records would have been maintained on a spreadsheet system. Both old-school methods have caused errors, mishandling and miscommunication. And when that happens, a business can expect both a downturn in revenue on top of the loss of drive/purpose from your sales executives.

Luckily, in this golden age of digital compensation systems, it’s unlikely that you’re dependent on the antiquated methodologies and are already familiar with a software package, whether that’s built in-house or provided by a third party. 

Seeing as you’re taking time out of your busy life to read this, it’s likely you’re looking for an upgrade – something that does the job better than right now. Whether a sales rep, manager or on the payroll team, you know what you want – a transparent, consistent compensation plan with an interface and reporting tools that go that extra mile beyond displaying sales targets and accrued commission.

Any plan should align with your wider business strategy. What the sales team achieves on the back of this is the benchmark for business growth and development, so it needs to be watertight and achievable in order to meet and beat the bottom line.

By investing in a compensation system software package that’s rich in relevant information and performance tracking, you’re more likely to have a loyal team who feel motivated, informed and involved. Get it wrong and you risk the waving goodbye to a high-performing sales executive as they wing their way to the competition.

What your compensation plan software should provide


  1. Look and feel

Looks aren’t everything, but an easy-to-digest interface with first-class graphics and mapping should be part of your priority package. You and your team want to understand information at first sight, knowing which data fields and reports are relevant. A sales manager wants to know immediately how close someone is to target if they’re under-performing or if there is a perhaps a wider issue with promoting a particular product.

  1. Aligning with the wider sales picture
A good compensation system package should have the capability to digitally dovetail with your business’ broader sales objectives and strategy which can then be applied at the individual and wider team level when agreeing remuneration. Ideally, this should inform and integrate with quota and territory management software, so you’re able to work on a wider view of sales performance management.
 
  1. Visible results in real time

You’ll also be in the market for a system that enables greater control of targets, as well as viewing bonus entitlement versus commission. In addition to tracking the earnings and contributions of the top people, you want to make sure underachievers are not hiding from view, which is much easier then when you can see the full data story. By selecting software that provides automated real-time updates and on-demand reporting tools, both you and your sales force can stay on top of performance issues and on track for compensation.

4. Data and functionality that really matter

While the current commission-related situation of any sales individual or team is important, you’re likely to have the need to stream historic data relating to their past record - especially when setting targets and settling compensation. Flipping this to the perspective and interests of the sales rep, they want more than an overview dashboards and data. They require a program that easily allows them to submit queries and issues, promptly providing answers and interaction whether they are remotely based in the field or in company head office.

5. If you build it, they will come (and earn compensation)

While the above factors take the confusion out of your software search, your compensation system software decision should be based around the principles of reliability, accessibility and freedom from the inaccuracies and knowledge gaps of previous systems. And when it’s installed both you and your team will see in an instant if they’re being rewarded fairly by performance and contribution.

Picture of Carrie Mohoric
Director, Professional Services

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