Three Key Steps to Manage Sales Compensation Disputes

In sales, compensation disputes are a given. Over the years, we have addressed comp disputes for clients in dozens of industries, some bigger than others. We’ve deployed agile processes and applied best practices with great success, but our mission is never over. Our experts have come to know these situations so well that we wanted to leverage their knowledge in a series of FAQs destined to “troubleshoot” problems like sales compensation disputes, and other issues that can plague a company’s bottom line.

How to Best Manage Compensation Disputes

Question: “Historically, we have always left compensation disputes up to the individual manager, but lately we’ve received complaints of delayed, unfair and unequal resolutions. What are the first steps to developing a standardized process to manage sales compensation disputes?”

Investigate and identify

Conflicts over sales compensation can lower morale, steal time that could be used to sell, and increase turnover. A compensation dispute is never something managers want on their to-do lists. Considering the flurry of automated solutions and centralized processes that exist specifically for tracking and resolving these issues, compensation disputes occur more often than they should.

The first step in developing a standardized process to manage compensation conflicts is to assess your history of disputes. You can’t identify problems without properly assessing past experiences. Disputes mostly stem from poorly communicated plans, bad source data, inaccurate or manual processes or (more often than not) inefficient systems. So, identify the processes your sales organization struggles with.

The way you resolve sales compensation disputes is equally important. An individual manager isn’t always the best person to review a discord. An assessment of past experience can help you identify which disputes should be directed to the managers and which should be reviewed by others. Continuous assessment will lower the number of disputes substantially, and once the underlying problems go away, the number of disputes can fall by as much as 90%. But we don’t do it all by hand.

Deploy and fix

With a tool like Optymyze Workflows, automation of your disputes system is simple. Any internal processes identified as a contributor to disputes must be reviewed. This is an important step in setting up a standard process for managing disputes because it impacts sales agents directly.

A well-defined categorization of the disputes will help sales agents identify the culprit beforehand and assist managers, analysts and any other parties involved in the resolution process. One example of such a category is missing transactions, caused by bad data. Individual managers have no impact on data provision, so these types of disputes can be directed towards the analysts or BIU teams for a resolution.

On the other hand, in disputes where the sales agent is requesting credit for sales, the managers should be responsible for their resolution. The managers know where the ownership stands for all sales and can offer the sales agents better visibility into their comp plans, reducing shadow accounting and ensuring the reps understand why their credit request was approved or declined.

This way responsibilities are pigeonholed amongst individual managers and the sales support teams (BIU, Analysts, etc.), providing more balance, consistency and structure. Such a system uses business rules to establish guidelines for dispute resolution and creates a workflow process to manage approvals of proposed resolutions.

Reap the benefits

When sales compensation disputes are minimized and the remainder is fairly manageable, agents and managers spend less time fixing problems and are no longer disgruntled, so turnover decreases as well. Addressing sales comp disputes has never been a walk in the park but, today, the abundance of data and the struggle for market share makes it impossible to settle these disagreements manually. So improving sales comp with a standard process is no longer a maybe, but a must.

Sales comp disputes are a red flag indicating you need a centralized process to track and resolve friction, preferably neatly and consistently. For a deeper look at managing compensation disputes in your company, drop me an email below or visit our business site. Every problem has a solution. Why let comp disputes pile up when you can do something about them?

Alexandru Sandu

Senior Consultant

Alexandru has over 4 years of experience working with Banking and Telecom industry clients in managing and improving their incentive compensation plans and solutions.

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