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How Incentive Compensation Affects Sales Performance

When deciding which business processes they need to automate with IT solutions, many businesses overlook sales incentive compensation management, or ICM. This can be a problem because incentive compensation is a major factor in motivating sales teams. A look at how incentives drive individual sales performance will show how an automated ICM solution can help a company improve sales team performance. Sales commissions obviously motivate sales teams because they link employee compensation directly to performance. Simply put, when sales representatives close sales, they get monetary rewards. When certain quotas are met or representatives exceed sales projections, they can get bonuses or other incentives. These things motivate sales professionals to perform well because they benefit directly from increased performance. However, this system of incentives and motivation can break down when incentive compensation is mismanaged. If incentive schedules aren’t directly tied to actual sales numbers or incentive payments are unreliable or prone to error, then trust between management and employees break down. The motivation to drive sales evaporates when employees can’t expect timely and accurate sales incentive compensation. Self-reporting of sales for incentive payments can also lead to mistrust and overpayment of sales commissions and incentives. This, in turn, can lead to increased employee turnover in the sales department. An automated ICM solution can change all of this, leading to increased sales team retention, motivation and performance. Glocent’s software automatically calculates sales incentive compensation using sales data, eliminating reporting and calculation errors. Glocent can also export reports directly to the payroll department so sales incentive payments are timely and reliable. The innovative server-hosted software also provides sales representatives with 100% accurate sales activity reports so that they can see exactly how much their incentive compensation payments will be. With accurate reporting and calculation, Glocent can increase employee motivation and sales performance.  

Transparency at the speed you do business!