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Iconixx Insights BlogIncentive Compensation Management

Understanding the importance of compensation software

By July 1, 2015June 11th, 2024No Comments

Compensation for a job well done works on many levels. It encourages sales reps to perform at a high level and helps with employee retention.

According to a white paper by International Business Machines, proper or improper compensation is the primary reason individuals decide to work for or leave a specific organization. Because of the clear importance of compensation, it is crucial that businesses do not allow the threat of human error to impact compensation tracking. In addition, simplifying compensation tasks will help improve the overall experience of employees and ensure everyone receives proper payment for their overall sales productivity.

“Employees want to know exactly what determines pay and how they can maximize compensation.”

Engage and motivate employees
With proper compensation, sales reps will be more likely to stay with a business and continue to work hard to bring in revenue. According to IBM, individuals are approximately twice as engaged if they feel they are receiving suitable compensation for their efforts.

According to HR.com, a human resources publication, compensation improves job satisfaction, and accurately and efficiently performing tasks related to the compensation of employees is crucial for success.

Due to the high cost of compensation, it is important to invest in the best compensation strategy to ensure sales people feel rewarded without breaking the bank. Compensation technology can help track what types of compensation help motivate sales people and engage them with the organization.

With compensation analysis, managers can evaluate everything from salary structure to merit distribution scenarios. By first identifying what motivates employees, managers can decide how to best compensate the top sales reps.

IBM also noted employees want to know exactly what determines pay and how they can maximize compensation.

Investing in compensation technology
Performance and compensation management software helps improve sales effectiveness. According to IBM, compensation technology can help increase productivity, improve efficiency, consistency and trust between management and sales reps. Without the risk of human error often seen when businesses turn to spreadsheets, managers can easily and accurately complete compensation tasks.

“Spreadsheets are powerful, convenient and fast for single power users with clean data,” IBM’s white paper noted. “But they are cumbersome, error-prone and not scalable for most compensation processes.”

Due to spreadsheet’s inability to properly and effectively meet the needs of a sales manager working to reward top-performing sales reps, it is important for operations to invest in compensation software that allows managers to track performance and pay of all sales people.

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KBH Ventures was an early investor in Iconixx Software. KBH's investment philosophy plays a significant role in the firm's successful track record. KBH believes in running businesses to be cashflow positive and profitable every month. Startups and companies in a startup mode, such as one that has been purchased in distress, are expected to generate revenue within the first six months and reach profitability within the first 12 to 18 months. KBH also only invests in or acquires companies that are in the startup phase or have less than $20 million in revenues. KBH targets technology companies that offer business-to-business services.

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