Companies generally perform periodic assessment of their sales incentive plans to ensure that they meet the desired business objectives and are perceived to be fair by the salesforce. This assessment should combine qualitative feedback from the salesforce and leadership along with quantitative analyses of historical incentive payout performance. There however are additional aspects of the incentive compensation process which needs detailed review to ensure the success of the incentive compensation program.
One of the aspects that need to be reviewed is the incentive compensation plan operational strategy. Many companies rely on excel spreadsheets or home-grown script based solutions to manage their salesforce incentive compensation programs. These solutions are generally preferred because of existing analysts’ familiarity with these applications and perception of control without giving enough consideration to quality and efficiency. There are many limitations with excel spreadsheet based solutions. To highlight a few:
- Error prone due to complex formula writing and ongoing manual intervention
- Difficult to control and audit changes
- Cumbersome to automate end-to-end processes
- Limited reporting options. Requires complex VBA scripts for representative level reporting
- Difficult to implement plans using cascading data from other hierarchical levels
