The Forbidden Fruit in your Incentive Compensation Plan: Spreadsheets!

August 1, 2022
Diya Mathur
Diya Mathur
Diya Mathur
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If you are in charge of designing the Incentive Compensation plan at your organization, chances are that you have found yourself in a position similar to that of Eve in the Garden of Eden. Data-driven research like this one conducted by Hubspot has warned you about the cost of using spreadsheets, but it is so tempting! The reason is simple- they bring a certain familiarity to this otherwise daunting process of compensating your sales team. So you do what 75% of sales companies have already done- take a bite from that apple. The pandemonium that follows is nothing short of an administrative nightmare. While spreadsheets may seem convenient at first, the truth is that constant changes in your incentive compensation plan will most likely break this traditional system.

The good news is that unlike Eve, you still have a way out- Automation! It is no secret that organizations using automated Incentive Compensation Management solutions designed to keep up with the evolving business ecosystem are better positioned to deal with future ‘what-if’ situations. If you are an organization that is using traditional and legacy systems for your Incentive Compensation Management, here are three reasons why you should consider automation based compensation-

3 reasons why you should choose Automation over Spreadsheets:

Real-time insights that drive performance

A good Incentive Compensation Management plan should communicate to your reps what they need to do and how they can earn more. Updating spreadsheets is a manual process and most companies prefer to do this only once a month. Chances are, that more often than not, your reps don’t even know how much they are going to get paid until the end of the month when they receive their compensation. If these spreadsheets are error-prone, it becomes increasingly harder for your reps to trust the organization’s data and they are likely to resort to shadow accounting. 

By releasing sales data from the silos of spreadsheets, an automated incentive compensation solution, powered by advanced sales data analytics, can act as a trusted advisor for your sales reps.. A report conducted by Forrester published in Forbes reveals that a staggering 90% of growth leaders believe that real-time insights are important. With real-time commission trackers, each rep can get a personalized dashboard with real-time updates as they move closer to their quota and specific goals. Allowing your sales team to automate their performance and plan their earnings and milestones for themselves will significantly increase their visibility and restore trust in the organization. 


One of the most pressing issues that you face if you are in charge of managing the Incentive Compensation plan for your organization is this- How do you bridge the gap between having data and using it? Reports should be produced throughout the year using both the drill-down and the drill-up approach in order to get a granular view of the data for better forecasting. The information collected from these forecasts can be used to make intelligent choices that drive your sales and revenue. Forecasts can also help your company administration identify potential problem areas and be better prepared for ‘what-if’ scenarios.

Traditionally, data is compiled from multiple spreadsheets throughout the quarter and is analyzed at the end of the quarter to create a roadmap for the future. While this sounds simple, the truth is  that this is a mammoth task when done manually. Any errors in these spreadsheets can completely throw off your organization’s predictions and you may find yourself struggling to meet goals. In fact, 55% of sales companies don’t trust their forecasts. When expected to take strategic real-time decisions, growth leaders cannot be expected to rely only on their ‘gut instinct’ and multiple data points for scenario planning. A more scientific approach using an automated Incentive Compensation Management tool for incentive modeling and payout projections is the way to go. 


The ultimate goal of a good incentive compensation management solution is to align rep behavior with the organization’s goals and values, including OTE compensation. Needless to say, there is no ‘one size fits all’ strategy that all organizations can swear by. There are countless factors that are taken into consideration when an Incentive Compensation plan is designed- What will be the KPIs? How will incentives like bonuses, spiffs, MBOs, and prizes be represented in the plan? What will be the motivating principles?

Think of a scenario where a company uses different motivational principles for employees at different levels. People who are new to sales might find themselves getting motivated by commissions because they don’t have many clients at this stage. On the other hand, veteran salespeople may be motivated by the annual bonuses that they receive for exceeding their targets. Spreadsheets just don’t have the bandwidth to incorporate these complexities. If you think that your administration is struggling to keep up with manually updating your spreadsheets, an automated solution with integrations across CRM, ERP and HRIS is the light at the end of the tunnel.

To learn more about how an automated Incentive Compensation Management solution can help you make better real-time strategic decisions, Book a demo

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Diya Mathur

Diya is a Product Marketing Associate and content writer specializing in Incentive Compensation Automation. Diya has honed her ability to bridge the gap between intricate software functionalities and accessible, reader-friendly content. Her articles are a testament to her dedication to breaking down intricate SaaS solutions into digestible insights that cater to both tech-savvy professionals and those new to the software landscape.