Incentive compensation management is a complex science. It involves keeping a sales team on the same page, sometimes when they’re not even on the same continent and leveraging the strength of innate human behaviors to succeed in the long term.
The importance of incentive compensation plans is often overlooked because businesses don’t understand the potential impact of behavioral science – what the right incentives can do to drive business profits.
But with the right incentive compensation strategy, companies align their corporate goals with the full capacity of their workforce. Think of incentive compensation management as the rungs on a ladder. Business management sets these rungs in place, so their team can climb as high as possible.
There is a direct correlation between a company’s current incentive compensation strategy and its future success.
But there’s a critical difference between incentive compensation strategy and incentive compensation execution. Without automation, effective execution is nearly impossible.
At Xactly, we believe in empowering companies to pay-for-performance with incentive compensation.
That means their compensation payments are accurate, on time and fair. It also means that companies can offer incentive compensation that focuses on market changes and corporate goals without hiring expensive professional services teams.
We do it by offering incentive compensation software.
Using our solution, companies can build incentive compensation plans without having to create complicated Excel spreadsheets or bringing in a team of coders. They add special incentives without adding staff.
Some incentives are financial. Other incentives compensate employees in non-financial ways. The strongest mix of incentives will leverage the unique motivations of each member of your team.
As you assess your current incentive compensation practices, it’s critical to that you:
- Involve the right people in your compensation plan design team
- Strategically balance short-term and long-term
- Leverage the unique motivations of each team member
- Choose the right compensation metrics for your incentive plans
- Consistently evaluate what incentives are working and which are not
The bottom line is that incentive compensation creates a roadmap for change management. Incentive compensation harnesses the collective intelligence of an organization and optimizes available resources to create companies that win.
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