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Drive Business Results Through Successful Sales Incentive Administration

by Donya Rose

PeopleSoft White Paper Series, March 2003

Most companies today provide performance-based incentives to salespeople, as well as to executives. Increasingly, employers are also choosing to provide incentives to employees in other mission-critical functional areas.

However, the systems and processes used to administer incentives are often costly and confusing to payees at best, and error-fraught and demotivating to payees at worst. Those who administer incentives face a series of daunting challenges to ensure that the plans deliver measurable value for the company. A company failing to administer sales incentives well can experience significant
negative repercussions, including:

• Excessive costs in overpayment of incentives.
• Excessive costs of administering incentives.
• Demotivated salespeople.
• Lost selling time and selling capacity.
• Loss of revenue.
• Loss of salespeople and their relationships with customers.
• Managing incentives is a high-stakes undertaking, rarely yielding results that satisfy all stakeholders.

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