Innovation in Sales CompensationChanges in the economy have resulted in many businesses reviewing compensation expenses.  The sales commission budget – traditionally the largest cost- is often under scrutiny.

Can that expense be lowered with a new incentive calculation process? Data shows that 75% of organizations with 1,000-2,500 employees currently determine commissions using spreadsheets. This approach can lead to overpayments on bonuses and commissions, increased risk of error, loss of time, and inaccurate readings of data.

This often-complicated procedure can be simpler and more exact with the use of Incentive Compensation Management (ICM). ICM simplifies compensation management while offering a wealth of information.

Loading data into a spreadsheet is time consuming and allows for a high margin of error.  When the spreadsheet is complete, you are left with a commission amount and not much else.
Incentive Compensation Management delivers accurate payment facts, as well as direct correlations between compensation and performance.  You have the flexibility to change the plan duration (monthly, quarterly, annually, etc.), re-calculate commissions with new parameters, and have multiple quotas or multiple forecasts. The most current figures from sales, finance and HR are included without the manual collection of records or modification of formulas. Data is obtained automatically combining the information quickly and accurately.

Yes, there is an expense with an ICM, but with proper use you will almost immediately experience cost savings.  Since you are no longer working with complicated spreadsheets, compensation plans can be modified easily and correctly.  With access to sales performance versus commission paid, you can monitor sales trends, quota performance, and attainment distributions using real-time dashboards and reporting. Current incentives are easily visible and sales teams are able to determine their actual and projected commissions.  Questions regarding the payout can be done through Incentive Compensation Management and communications are directed to the appropriate parties.  All inquires and responses are also traceable, allowing for transparency with the process.

At a time when organizational efficiency and effectiveness are of great importance, Incentive Compensation Management establishes payroll as a seamless business process.  A decrease in errors combined with an increase in productivity promise that ICM offers the highest financial return in the shortest amount of time.  Limited effort will be spent researching and resolving sales disputes, and with precise sales incentive calculation your team will exert less energy checking on their pay, and more time selling!


Eliot Burdett

CEO at Peak Sales Recruiting
Before Peak, Eliot spent more than 20 years building and leading companies, where he took the lead in recruiting and managing high performance sales teams. He co-founded Ventrada Systems (mobile applications) and GlobalX (e-commerce software). He was also Vice President of Sales for PointShot Wireless.

Eliot received his B. Comm. from Carleton University and has been honored as a Top 40 Under 40 Award winner.

He co-authored Sales Recruiting 2.0, How to Find Top Performing Sales People, Fast and provides regular insights on sales team management and hiring on the Peak Sales Recruiting Blog.

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