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Where to start? Kicking off an incentive compensation plan

By July 9, 2013January 16th, 2023No Comments

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.

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Ballast Point Ventures

Ballast Point Ventures is a later-stage venture capital fund established to provide expansion capital for rapidly growing, privately owned companies in diverse industries, with a particular emphasis on companies located in Florida, the Southeast, and Texas. The BPV partners have more than 70 years of combined experience investing in and building high-growth companies in a number of industries, including healthcare, business services, communications, technology, financial services, and consumer goods. BPV has $200 million under management and seeks to make equity investments ranging from $3 million to $10 million.

Harbert Management Corporation

Harbert Management Corporation seeks to generate superior returns for their investors by identifying and investing in the most promising early growth stage companies in the Southeastern U.S. HMC seeks to capitalize on what it believes are compelling regional dynamics, such as a strong and fast-growing economy, significant research and development activities, and an established entrepreneurial community. The HMC team combines substantial investment, advisory, and operating experience with capital and networking contacts to support great entrepreneurial teams in successfully executing their growth plans. With offices in Birmingham, Alabama; Richmond, Virginia; and Gainesville, Florida, it’s well positioned to partner with entrepreneurs throughout the Southeast.

KBH Ventures

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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S3 Ventures is an early expansion and growth stage venture firm with $200 million under management. It’s focused on information technology solutions that solve large business problems. S3 also invests in medical devices that improve the human condition. S3 invests in category-defining opportunities. It partners with the team and help focus methodically on what it takes to build a successful company. S3 today helps talented entrepreneurs take their technology and market knowledge and form valuable businesses in a repeatable fashion. Investment sizes start at several million or more for Series A, B, and C financing.