Commissions Disputes: the Reason Everyone Feels Sorry for Your Comp Manager
I’m going to make a sweeping statement right now, but it’s one I think would be absolutely accurate. If you were to poll every six-year-old child in America and ask them what they want to be when they grow up, not a one of them would give the response “sales compensation plan manager.” In addition to the fact that few kids have any idea what that job actually is, there are great reasons to cringe at the notion of becoming a compensation plan manager. The people who serve in those capacities are heroes who keep their businesses going in the face of frustrations that would drive many of us into entirely new lines of work, like landscaping, dog-catching or, maybe, politics. The major issue making this line of work particularly daunting has been the fact that many companies still use manual processes and spreadsheets. The plan manager is the person plugging numbers into the system, checking the math, and making the call about who gets what. Manual processes inevitably lead to mistakes, and mistakes in sales compensation plans inevitably lead to disputes with salespeople. While I knew this was common, it wasn’t until I spoke to some of our customers that I realized how common it was. One said that, before automation, she spent four hours a day dealing with disputes over commissions payments. Think about spending half your day being confronted by people convinced you had cheated them out of their hard-earned money. If you didn’t do it intentionally (because you’re a nefarious shill for the company), then it was a result of your own mistakes (because you’re incompetent). It’s hard to imagine a more soul-crushing exercise than spending half the day trying to prove your innocence – or having to build a case against yourself leading to a mea culpa. The parallel issue in these companies is that the sales reps aren’t presenting disputes unless they’re spending time on shadow accounting rather than selling. Not only is the sales force angry, but it’s not making as much money as it could be because it’s spending time defending the money it’s already earned. And when the sales force isn’t earning commissions, the company is not realizing revenue. Once sales compensation was automated, the customer reported that dispute resolution went from a four-hour-a-day task to something she spent a few minutes on daily. Spreadsheet-induced manual mistakes went away, and the sales force had a renewed faith in the accuracy of its payouts. Researching disputes became a quick function, and salespeople no longer viewed the comp plan manager as an adversary. Another customer discussed the nightmare of the end of the quarter. She would assemble all the pertinent documents and spreadsheets and retreat to her office for a series of 12-hour days, often starting Wednesday and spanning the weekend, in which she tried to compute the commissions for a company with a very complex set of comp plans. Should a salesperson find some important information that could affect his commissions after she started this ordeal, he or she was turned away brusquely – it was too late, and once the ball started rolling on this exercise, there was no going back, lest it never be completed. Then, after this ordeal, the disputes came in a wave that swamped two or three more days. Automation gave this customer her weekends back. It also allowed the company to pay more frequently, and to adjust its comp plans with greater agility – and it allowed the plan manager to work in a more strategic way with sales management to make the comp plan more effective in driving the right sales behaviors. These stories are fairly widespread, and we hear more of them as the cloud makes commissions management software a viable thing for smaller and smaller businesses. So, take a look at your comp plan manager. Do you see someone who’s able to act strategically and collaborate with your sales managers to turn your comp plan into something that drives better sales performance? Or do you see someone frantically trying to keep multiple balls in the air while at the same time attempting to fend off unhappy sales reps and, in general, having a miserable time of it? If it’s the latter scenario, do your comp plan manager a favor and explore your options for automating compensation plan management. How does CallidusCloud simplify life for compensation plan managers – and make more money for their companies? Get the lowdown on CallidusCloud Commissions.