An incentive to use incentive compensation mangagement

Companies using incentive compensation management (ICM) software to manage workers’ bonuses report a high level of satisfaction and ROI, says Gartner.

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By  Neil Denslow Published  May 28, 2003

Companies using incentive compensation management (ICM) software to manage workers’ bonus report a high level of satisfaction and ROI, according to Gartner. In a recent Gartner survey 65% of users gave ICM applications a rating of eight or more out of 10.

Gartner surveyed 29 ICM clients on a variety of topics that covered aspects of the selection, implementation and production experience related to ICM applications. “For the processing and payment of commissions to salespeople, packaged sales ICM applications have become the solution of choice to replace mainframe-based commission systems or spreadsheet-based commission and performance tracking,” says Joe Galvin, group vice president for Gartner.

“During the next two years, successful ICM system deployments will produce tangible ROI through increasing the efficiency and effectiveness of sales performance management.”

In the survey 55% of respondents said they had achieved a positive ROI from their ICM system. “The high rate of ROI associated with these applications suggests that businesses struggling with cumbersome, inflexible or inaccurate compensation systems should take a hard look at the potential value of replacing legacy systems with the current generation of ICM systems,” said Galvin.

Among benefits cited by respondents was improved efficiency (cited by 88%) and enhanced effectiveness (85%).

Gartner also advises that as part of the cost justification analysis, businesses should evaluate their commission systems’ accuracy and flexibility for commission and performance reporting, along with the associated administrative resources and time required for commission reconciliation.

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