How to Document your Sales Compensation Administration Process

Apr 22, 2020
2 min read
We have been fielding questions around how to strengthen organizational capability around Sales Performance Management (SPM). Here's how to document your sales compensation administration process and why it helps.

We live in a dynamic world, for some people things are getting increasingly busy and others are  entering a period of slow down. On both sides of this equation, we have been fielding questions around how to react and what to focus on to strengthen organizational capability around Sales Performance Management (SPM). Business process documentation of the compensation administration process is one of the top three items that we recommend for a number of reasons, including: 

1. Secure the Knowledge 

Not many companies have documented their sales compensation admin process.The knowledge often lies in the head of 1-2 individuals and companies would be unable to execute on their calculation process if that knowledge left the company. 

2. Design a Repeatable Process

Once documented the process can be repeated in a like fashion every payroll to ensure consistency in the process steps which allows easy identification of what steps may introduce errors or risk, waste time, or are unnecessarily redundant. Metrics can be put around a mature repeatable process to gauge the effectiveness and efficiency of the process and continue to make improvements over time. 

3. Onboarding and New Hire Training

As the sales compensation administration team grows, team members are backfilled due to attrition, leaves, or vacation. Putting a well-documented process in place significantly shortens the ramp time for the new person executing on the process.    

Our advice for the first pass at process documentation is to keep it clear and simple. You can use more advanced techniques and tools once you capture your process at a level of detail that allows you to secure the knowledge and for the process to be repeatable. For a clear and simple process key things to capture include:

  • The beginning and the end of the process
  • The timing of the process on the calendar (when is data available, when is payroll due for that month, that quarter, etc.)
  • The tasks required to complete the process 
    • Inputs (data, email notification, etc.)
    • The “how” (run report ABC in system 123, export to folder XYZ) 
    • Success criteria (how do you know the task is complete (screen will refresh and say “file successfully exported”) 
  • The job role (not the individual) responsible for each task 

We have created a Sales Compensation Process Documentation workbook to help get you started. If you have any questions or would like to discuss how Xactly Strategic Services can help with this initiative please contact

Business process documentation is often pushed out to “when we have time”. I recently saw the phrase, “The best time to plant a tree was 20 years ago. The second best time is now.” This proverb speaks to the idea that now is the time to tackle items of key importance even if it hasn’t been done before. The longer you wait, the greater the risk of something going wrong that you should have addressed.  Create some time in the coming weeks to document your Sales Compensation Administration process. 

  • Incentive Compensation
Justin Lane
Justin Lane
Sr. Director, Strategic Services

Justin Lane is the Sr. Director of Strategic Services. He has experience helping companies develop best in class Incentive Compensation Management Strategies (sales and non-sales).