One of the core SPM 'Best practices' that managers in sales, finance and HR should always remember when accessing the state of their Sales Compensation process is the proven value of being able to reward actions that are aligned with your sales and company goals as soon as possible once they occur. (click here for a more in depth discussion)
To the executive team responsible for driving the performance of their sales team, this means providing performance feedback to sales as soon after the close as possible. If possible, it is even better to do this sooner than the close with periodic progress reporting during the performance period.
The fact of the matter is that most are currently struggling to keep up with, let alone be in a position to collapse the cycle time of, their sales commissions process.
The chart below (from a recent survey on Sales Performance Management by WorldatWork & OpenSymetry) highlights the current state of how long it takes to complete the cycle, typically understood to begin when sales data f9or the prior performance period is available to when commission checks are cut. Only 15% of the 422 surveyed companies can execute this process in under two weeks! 40% process in less than a month while over 60% take a month or longer.
Targeting cycle time improvement in 2014 is a goal that will pay tremendous benefits. Imagine if your company were one of those able to go from beginning to end in less than 2 weeks. Compliment that with accurate calculations and crisp, clear web based performance reports and the sky is the limit. Analysts would spend less time administering and more time analyzing; Sales Reps will be happier with improved service levels and trust and have confidence to focus entirely on improving sales; Finance will have solid accruals earlier in the process and sales management can charge ahead confident that the Sales Performance Management Process is doing the job of providing timely performance feedback to their front line troops.
Resolve to 'own' 2014 - make this the year you give your process the 'fork lift' upgrade it needs !