Three Best Practices for Sales Compensation

Jul 25, 2018
2 min read
Outdated processes and unreliable data can roadblock sales potential. WorldatWork partnered with Xactly to share three best practices for compensation.

Figuring out sales compensation is not for the faint of heart. Outdated processes and unreliable data can roadblock any company’s sales potential. Fortunately, we’re all in this together. WorldatWork recently partnered with Xactly in a webinar to share three best practices for sales compensation.

These best practices are the result of over a decade’s worth of sales performance management and incentivization experience, along with corroborating data from the 2018 Sales Compensation Best Practices Study. While the ins and outs of sales compensation may complicated, sales operations teams can implement several best practices to navigate complex processes more successfully. 

1. Improve Payment Accuracy

According to the 2018 Sales Compensation Best Practices Study, 80% of companies struggle to pay commissions accurately. Even a one percent error rate in compensation can cost a company tens of thousands of dollars—which means ensuring compensation accuracy should be a priority for all.


Not only can inaccurate payments cause financial duress, the employer and rep relationship can be negatively impacted as well. According to the Veritas Network, “Organizations that score well on its trust-based index tend to see about 40% difference in their cumulative returns, indicating the distinct financial and competitive advantages of getting this right.”

Companies that are looking to decrease costs and increase rep morale by improving payment accuracy should incorporate several key plan components, including:

  • Verifying metrics and automating comp systems
  • Driving errors out of upstream data
  • Improving the overall administration process

2. Increase Visibility

Almost 10% of companies do not offer any formal incentive plan documents to their sales reps. Over 40% of the study respondents offer manual documents via PDF or Excel; however, many of them only provide their reps with this information during the first quarter sales planning process.

This means that many sales reps are left in the dark—and typically resign themselves to calculating and verifying their comp plans themselves. Reps who have restricted visibility often spend countless hours “shadow accounting” and miss out on valuable selling time due to the lack of trust in the compensation payment process. In the long run, time spent shadow accounting can harm sales performance.

In order to provide both sales operations leaders and reps the information and confidence they need to perform their jobs well, companies should ensure that they procure a compensation solution that allows for continued process visibility by:

  • Presenting reporting to all stakeholders in a timely manner
  • Communicating transparently throughout the entire sales process
  • Offering reps a mobile solution to fit their flexible schedules

3. Reduce Plan Complexity

For big and small companies alike, the complexity of a sales incentive plan can cost incredible amounts of time and money. In fact, Gartner reports, “50% of sales comp admin time is spent correcting inaccuracies based on complexity and data errors.”

These inaccuracies can lead to financial loss and sales rep dissatisfaction. Sales comp plans should be monitored and discussed throughout the year—and incorporating several critical elements into the sales plan can make huge impacts on the coherency and function of the process. Sales operations teams should:

  • Start with cross-departmental plan communication
  • Develop the Governance Board and COE buy-in
  • Uilitize benchmarking data and adjust accordingly

Understanding how payment accuracy, visibility, and plan complexity impact your sales reps and their potential is critical to success. To learn more about the top challenges faced by compensation administration professionals, and how to rate and improve the effectiveness of your sales compensation administration process, watch the free on-demand webinar.

  • Incentive Compensation
  • Sales Planning
Lisette Walberer
Lisette Walberer
Content Marketing Manager

Lisette Walberer is a Content Marketing Manager at Xactly. She earned her BS from NAU and is pursuing an MA in English from ASU. She has experience in both content strategy and creation.