When a company decides to begin using an incentive compensation plan, there’s plenty to consider. How much should it spend? How will success be tracked? Will the plan truly motivate employees?
With all that to think about, it’s no wonder many executives and decision-makers find themselves a bit stuck on where to begin. Keep reading to find a list of things to think about before launching an new incentive compensation management initiative.
Identifying areas for improvement
The first step in mapping out an ICM program is to figure out what company practices need to change and can be improved through software use. It may be that a certain product is struggling to sell, or that employee engagement is low and revenues are dropping. Whatever the problem is, it’s important to pinpoint just what an incentive compensation plan will aim to fix.
Sales executives can help identify these areas of improvement by using business analytics software. Software will gather raw data and convert it into measurable and easy to understand graphs and charts that will reveal where a team needs to work harder or improve sales.
Establish a budget
Incentives don’t have to be excessively expensive, but it’s important to decide just how much a company is willing to spend on incentives.
If a company is pressed for funds, VPs of sales can consider small but effective rewards such as gift cards, days off or flexible schedules to work from home once a sales goal has been achieved.
Another way to save costs is to use incentive compensation software. Using ICM software eliminates the need to outsource analytics and management to external companies, making it a smart investment for any business.
Set standards of success
HR professionals and executives should create a list of objectives that a company hopes to achieve through an ICM plan, whether it’s improved sales, reduced absenteeism or increased employee engagement.
Once this has been established, executives can track performance and make sure a plan is truly succeeding.
The right ICM program can make a world of difference to a company, and with a little planning, higher sales and increased revenues are just around the corner.
