How to be Indispensable as an Incentive Compensation Manager

How to be Indispensable as an Incentive Compensation Manager

Learn how to demonstrate your unique value and skill set as an incentive compensation manager.

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An incentive compensation manager holds a critical role in keeping an organization running. But it's a role that can often make you feel like you're a proverbial cog in a wheel, overseeing many critical tasks without ever being recognized for the unique skills and knowledge that you, and you alone, bring to the table.

Then there's the technology conundrum. You want to have access to the most impactful solutions and systems that improve your ability to do your job well - but you also worry about the perception that these powerful tools are more valuable to the company than you are.

If you can relate to these concerns, you've come to the right place. In today's article, we'll explain how you can make your efforts stand out and earn you deserved recognition as an indispensable asset to your organization.

What does an incentive compensation manager do?

First, let's cover the primary responsibilities of an incentive compensation manager. Although these may vary from company to company and role to role, here are the core functions of an incentive compensation manager.

Design compensation plans

As an incentive compensation manager, you manage or play a key role in the design of your sales commission plans. Working alongside sales, RevOps, and executives, you develop comp plans that motivate sales performance while simultaneously supporting the business's key objectives.

Administer commission plans

You also play a key role in executing payroll and continuously managing the overall commission process. You oversee commission calculations and implement measures to ensure accuracy, make changes to commission plan structures, report on commission to senior leadership, and resolve any errors or disputes that may arise.

Maintain compliance with legal regulations

The emergence of compensation reporting regulations - specifically, ASC-606 - and new pay transparency laws has made compliance more critical than ever before. It's your responsibility to keep tabs on legal developments, work alongside your legal department to mitigate compliance issues, and play a key role in the financial auditing and reporting process.

How to become indispensable as an incentive compensation manager

Now, let's explore the most impactful ways to make yourself indispensable to your organization.

1. Build meaningful relationships with commissioned employees and sales leadership

First and foremost, it's important to cultivate strong relationships with commissioned employees. After all, the work you do has a serious impact on how these employees are compensated, which in turn impacts their job satisfaction, morale, and overall wellbeing.

If you're just the person who calculates their commission, distributes commission statements, and fields the occasional question, then your relationship is purely transactional. They won't view you as a partner in their efforts to reach their full potential - and you may even become the subject of their resentment when their earnings fall short of expectations.

But if you make an effort to truly connect with commissioned employees - to learn about their personal goals, fears, preferences, strengths, and weaknesses - then you'll be able to transcend the passive role of a commission calculator and offer them personalized tips and advice on how to maximize earnings. In turn, you'll be able to design comp plans more effectively, while also establishing yourself as a valuable asset to the sales organization.

The same goes for your relationships with sales leadership. Show sales leaders that you want to understand their goals, how they view their sales teams' performance, and the most urgent challenges they're facing at any given time.

The relationships you build across the workplace will set you apart from any hypothetical replacement who can fulfill the basic operational responsibilities of a comp manager - and it will certainly set you apart from any piece of incentive comp technology that's incapable of building relationships at all.

Tip: You don't need to pester every commissioned employee with frequent check-in messages, but that doesn't mean you should sit back and wait for them to reach out to you. Here's a happy medium: prioritize compensation communication and set aside time on your calendar for weekly "office hours", where any commissioned employee can join you to ask questions, voice their concerns, and provide general feedback about how they're feeling about their commission plans.

2. Monitor market trends

Your organization's sales compensation strategy doesn't exist in a vacuum - it's continuously being affected by changes in the market, both within your given industry and the broader economic landscape.

As an incentive compensation manager, it's important to stay up to date on compensation trends, industry news, changing regulations, and the latest market analysis. Demonstrate that you understand where your company's compensation programs stand in the context of the industry at large. Be the employee who executives and sales leaders can count on to intelligently discuss emerging trends that might impact your commission programs or the company's financial wellbeing.

Tip: Distribute a monthly newsletter that covers the most important and relevant market trends that could have an impact on your organization's financial processes. You don't need to make grand declarations or suggest any serious changes, but positioning yourself as a source of valuable external research will make an impression on leadership and might even earn you a greater role in big-picture decision-making.

3. Maintain a deep understanding of your business's goals

Aligning your compensation structures with your business goals is an ongoing challenge for any incentive compensation manager. If you lack clarity into the company's most urgent growth objectives, this blindspot will result in compensation programs that appear optimal on the surface but fall short of their intended impact on the organization.

For example, let's say your company wants to push a new product more aggressively or establish a foothold in a new market. If your sales compensation plans fail to integrate these objectives and instead continue to over-emphasize total sales volume, this misalignment will be a hindrance to your company's objectives.

Conversely, if you demonstrate that you not only understand the business's goals, but can promptly translate those goals into updates to your commission programs, you'll prove your ongoing value to the business.

Tip: Again, communication is critical. Don't just sit back and wait for news to trickle down to you from the executive team. Invite executives, sales and finance leaders to a regular meeting where you'll discuss both compensation strategy and the business's current goals, and leave each meeting with clear action items on how you'll facilitate alignment moving forward.

4. Regularly test and optimize commission plans

If your strategy for comp plan design doesn't go much deeper than a "set it and forget it" approach, you'll start to look replaceable when your comp plans fail to deliver. No matter how much work went into designing the plans initially, their long-term effectiveness hinges on your ability to continuously analyze and improve them.

Make sure that commission data analysis is a scheduled, consistent part of your role, not just something you do when you have extra time on your hands or catch wind of a serious anomaly worth looking into. Work on your ability to draw correlations between your comp plans and sales performance, as these findings will help you identify areas for improvement.

Tip: Make sure the commission reports you create and distribute to sales leadership aren't just informative, but also instructive. Show them the results of your analysis and couple them with your expert opinion on how comp plans can be improved, whether it means implementing an accelerator to better incentivize top performers or adjusting territories to allocate resources more effectively.

5. Prioritize predictive analysis and risk assessment

According to the State of Sales report, 70% of sales leaders say their organization is taking fewer risks as a result of recent market conditions. Dependable growth is a premium concern among business leaders - and as an incentive comp manager, this is an area where you can deliver tremendous value.

Commission payouts have a major impact on the company's bottom line, so if you're able to predict future payout totals, leaders will be able to recognize and address any potential risks. If you play a role in protecting the company's wellbeing, there's no question that leaders will view you as an indispensable member of the team.

Tip: Obviously, your ability to generate accurate predictive reports depends on the technology you have at your disposal. So, if you're trying to secure leadership buy-in for a sales compensation solution that will help you excel in your role, here's a great bargaining chip. Highlight the importance of using the right technology to predict future commission metrics - and therefore improve forecasting and protect the company from risk - and you'll be more likely to gain support from leadership.

Proactively show your company the value of a great incentive compensation manager

In the professional world, there are a handful of universal experiences that transcend role and job function - paramount among them, the frustration and anxiety that stems from feeling like you're undervalued or perceived as disposable.

As an incentive compensation manager, you possess skills and knowledge that make you much more than an operational employee who facilitates a handful of financial processes. Don't wait around for your expertise to be recognized - use the tips we covered today to take initiative and show your organization exactly how much value you bring to the table. Not only will you feel more fulfilled in your role, but you'll leave no doubt that you play an indispensable part in the business's success.

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With eight years of experience as a marketing writer, Sam has explored a wide range of topics including sales and finance best practices, product innovations, and groundbreaking industry trends.