Whether it’s formally written or not, every organization has a compensation plan. The purpose of any compensation plan is to attract and retain qualified and motivated employees to achieve the goals of the organization. Furthermore, compensation management software allows organizations to execute that plan accurately. The core of compensation plans and software are salary, bonus, and incentive administration.
On paper, this may look simple. In reality, accurately managing bonus and incentive plans is a challenge. This is the reason many managers look to find out certain things about sales compensation management software before using it. Following are the most common questions about sales compensation management software:
Many organizations and managers often ask why sales compensation management is important. Following are the three things that make sales compensation management important:
- A sound compensation plan engages and motivates employees as it enables employee compensation to grow based on contributions and results generated for your organization.
- With rewards based on performance reviews and compensation metrics to encourage positive performance, compensation prompts employees to improve performance.
- Compensation helps define a career path for your best employees if it’s done well. Furthermore, it helps everyone in your organization to understand the value they deliver to the organization, the rewards for achieving goals, and ways to improve.
Question #2—Why is compensation management software important?
Companies lose their competitive edge when they do not have the right compensation software. The company will falter if its bonuses, performance reviews, pay raises, overtime, and equity compensation are faulty. Instead of ensuring accurate and compliant data each step of the way, poor software may require updates at the last minute and manual adjustments to finish.
Poor compensation plans and management waste time and results in loss of employees. Employees want to be recognized and paid fairly for their contributions when the company grows. Companies can ensure fair and accurate compensation for an employee’s contribution to the organization growth only if it has sales compensation management software in place.
Question #3—How does sales compensation management software encourage high performance?
Sales compensation management software allows an employee to receive compensation based on how well he or she performs. The key to motivating sales reps is providing a healthy level of competition as competitiveness is in their blood. Methods to motivate performance include data tracking as well as the ability to see where an employee is on the compensation performance hierarchy. With sales performance management, employees can find out exactly how they’re being evaluated. Furthermore, sales performance management helps sales reps to understand the metric they need to prioritize to achieve their compensation goals.
With sales compensation management software, sales reps can determine the changes they need to make to improve performance and achieve the best compensation. Schedule a product demo with our sales compensation experts today and learn how we can help you improve your sales performance to closer more deals.