How is incentive compensation calculated?

Incentive compensation

How is incentive compensation calculated?
August 28, 2019

The incentive compensation of your salespeople is calculated very simply ... as long as you have the right tools. Details of the 5 main advantages of a dedicated software.

Payroll, recruitment, training, evaluation, etc. : Outsourcing is spreading in all companies and concerns different HR and managerial activities. Several other activities are increasingly being outsourced, at least partially, to external providers. These activities are more or less strategic.

The calculation of the variable compensation follows this trend. Dedicated tools exist to assist you in setting up this complex and time-consuming process. First interest of this outsourcing: your teams will focus on tasks with higher added value by staying on their core business.



A good dedicated tool is able to handle all types of validation workflows. It takes into account all the constraints of the team and ensures compliance with the national goal. This allows you to centrally store information reliably and save time, inducing more motivation.



Your data are distributed on different servers and belong to several directions? No problem. Dedicated solutions have the advantage of recovering all the data needed to automatically calculate your bonuses, regardless of their buildings and sources. A properly configured software suite will efficiently retrieve HR data in your HRIS, as well as performance data from your CRM.

Automation of data flows facilitates data collection. This collection is carried out safely, with confidentiality of the transferred results data, relating to the performance.

The exceptions are of course managed to ensure the calculation of the bonus of the particular cases. For example, our tool easily calculates the four-month end-of-cycle bonus of a female employee returning from maternity leave in February, union delegate with a commercial function. Primeum collects the necessary information and applies rules thereafter to ensure equitable compensation, despite particular situations.

In addition to the HR exceptions management, the software allows you to take into account the data historical of the elements for calculating and implementing the reports.



Our tool guarantees you reliable results by checking upstream formats compliance. It also ensures you credible results by testing their consistency downstream. It is impossible for your employees to receive colossal bonuses due to a technical error!



Each company department is likely to need different data. A good dedicated management tool must be able to automatically generate and send personalized reports, defined with the different departments, according to the performance indicators that you have chosen upstream



The departments are logically informed of the different results. The beneficiaries, like your employees, also need to project themselves and simulate their incentive compensation. This will boost their performance.

Mailing, animation and simulation tool ...: there are several ways to communicate the data to your employees. In addition, you install a high degree of transparency in the establishment of your remuneration policy. You said nice employer brand?


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About the author

For more than ten years, I have been leading a number of projects for our customers to diagnose and re design the incentive compensation systems of their teams. The diversity of environments (sectors, countries, populations) that we face, my team and myself, requires a perpetual adaptation of our methods and our offer. The motivation of employees is, from my point of view, exciting, constantly evolving and at the crossroads of several areas of expertise. That's what makes it so interesting.

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