If they dont think that theyre paid appropriately, reps can lose motivation, spend their day double-checking essay payments and going back and forth about mistakes. All of this takes away valuable energy and time that they should be spending on selling. Reducing payment errors is one big reason why companies are adopting automated compensation calculations. With Xactly, for example, our customers have increased compensation payment accuracy up.8 percent, while lowering disputes.5 percent. Speed of payments, by eliminating delays due to inefficiencies, automation also increases the speed of settlement. Rewards that are delayed by more than a few weeks lose their effectiveness so you want to pay as close as possible to the sale or the win being recognized. Before automating its sales compensation processes, legalZoom, the leading provider of quality online legal solutions for families and small businesses, tracked all of its compensation on dozens of spreadsheets. Not surprisingly, this was a tedious and highly time-consuming task.
An extreme example of this is the recent scandal involving Wells Fargo. Pressured to meet objectives or suffer the consequences, including termination employees opened as many as 2 million sham accounts. While other factors certainly played into the wells Fargo debacle, essay its clear that the expectations being placed on employees were not achievable. The cso study found that over half of the firms surveyed use spreadsheets or manually calculate their commission payments. However, nearly 90 percent of spreadsheets have errors. Before adopting Xactly, hyatt Hotels relied on spreadsheets which, the majority of the time, they estimated were only 80-90 percent accurate. In addition to causing potentially costly errors for your business, inaccuracies reduce your reps trust.
A great way to start the annual review process is by looking at whats most important to your sales reps. Sales Compensation Plan needs, attainability of"s,"s need to be fair and attainable for a reps assigned territory or target accounts. Furthermore, territory assignments and accounts lists must be equitable, balancing workload and offering similar earnings opportunities across reps. If a rep doesnt think a" is achievable, they lose motivation. The rule of thumb says that you should expect most reps (ideally 60-70 percent) to perform at or above their". But it should still be realistic for everyone. Placing unrealistic and unachievable goals on your sales reps can have negative effects.
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According to the 2015 cso insights Sales Compensation performance management Study, a well-designed sales compensation plan supports key business goals. The right plan helps you achieve", identify reps that need more coaching and increase forecasting accuracy. However, to achieve these results, leaders must understand what motivates their team. Ive always anterolisthesis found the end of the year to be a good time to evaluate existing comp plans. Many companies start their fiscal year in January, and those that dont often follow shortly thereafter.
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