WorldatWork has said that 80% of companies are paying salespeople inaccurate commission rates. The 2017 Sales Compensation Administration Best Practices survey by Xactly found that companies with complex compensation programmes had higher turnover rates among salespeople, lower rates for meeting sales quotas and more errors in commission payouts.
The study also showed that 18% of employers do not report results to salespeople, and that 47% are slow to process payments, sometimes taking four or more weeks.
Other key study results showed that 38% of companies rated their reporting capabilities and analytics as insufficient or below average; companies with complex compensation plans were two and a half times more likely to have less than 80% accuracy; and 23% do not communicate sales commission and compensation plans until two months after the fiscal year begins.
Employers have good reason to improve their commission and compensation plans by reducing the number of errors and communicating those plans earlier. The Xactly study shows that efficiency and transparency are important to employees, apparently so much so that it affects retention.
Paul Arkwright
Publisher
