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Increasing Sales Commission Transparency

At Performio, we talk a lot about culture and work very hard together to impact it positively. As a team, we focus on this authentically, not just because we know a positive and healthy company culture is an organization that maximizes performance (although that’s a big one), but because we believe our technology places us at the end of it all, in the business of driving performance for partners who have trusted us with their compensation management.  

Albert Schweitzer famously said, "Example is not the main thing in influencing others. It is the only thing.” We believe that culture is at the heart of performance and since we’re in the business of performance, we’re in it whole-heartedly with full authenticity. At the heart of authenticity is transparency.

In a recent Performio Press ebook, “5 Sales Compensation Trends to Keep an Eye on in 2023,” we discuss that the quest for transparency doesn’t have to be a complicated journey, especially when it comes to sales compensation. But all too often, complicated and complex incentive compensation plans can unintentionally lead to confusion and eliminating that gray area is the key to success for any business. 

Sales commission transparency is crucial for morale and productivity. Your sales reps work hard, and they want to know that their effort is paying off. Providing a real-time window into their performance lets them see where they stand, encouraging productivity to meet their quotas, and preventing frustration from earning less than they expected. But a lack of transparency robs the company of these ideals, setting the stage for disgruntled sales reps and allowing your business to suffer.

But generating accurate sales commissions can be notoriously challenging on its own, especially for larger sales teams. 

You have to manage:

  • Different streams of data, including sales data, reference data, and people data
  • Various commission plans with differing quotas and territories
  • Workflows and reporting with complex comp calculations
  • Data privacy issues as you ensure everyone gets the information they need—and nothing more

Trying to offer transparency on top of everything else may feel impossible. But with the right solution, you can not only improve transparency, but increase overall efficiency while you’re at it.

In this article, we’ll look at how you can increase sales commission transparency by considering the example of Optus, who turned to Performio for their solution.

The importance of sales comp transparency

Before we look at how you can improve, let’s unpack a few of the reasons why sales comp transparency is so important in the first place.

For morale and productivity

Sales is hard work, but it’s made worthwhile by the payout at the end of each commission period. Your sales reps do their best to meet or exceed their quotas, knowing what they can expect with success.

But if they don’t have a clear idea of what they’re earning in return for this work, they’ll be left to their own devices to gauge how they’re doing. It isn’t uncommon for salespeople to have their own home-brewed commissions calculator spreadsheets on their computers, or even for them to use pen and paper to estimate their commissions while they’re discussing potential deals. And if your sales reps rely on their own calculations to estimate their payout, they may be wildly off the mark, setting themselves up for disappointment.

Then you’re faced with the task of explaining to disappointed employees why they won’t be bringing home as much as they thought they were, and you may get caught up in ongoing disputes that waste time and disrupt productivity.

By contrast, reps who have a window into their progress will know exactly where they stand, alleviating disputes or disappointments. And they’ll be able to adjust their performance on the fly to maximize their payout (and your overall revenue).

For acquiring and retaining star employees

For all the reasons outlined above, sales reps who are trusted with sales comp transparency tend to be happier and more satisfied with their jobs, which makes them stick around. On the other hand, insufficient compensation is the most common cause for sales reps to leave their jobs. With greater transparency, you won’t have to worry about losing your star employees over avoidable disputes.

And at hiring time, new prospects will want to know how your business operates for similar reasons. When they look at reviews of your company, they’re going to check what employees have to say about your processes. If they sense a lack of transparency, it may be reason for them to seek employment elsewhere.

For sales comp projections

Transparency isn’t just for sales reps. Your sales comp calculations help you gauge your overall business expenses. The same transparency your reps appreciate also allows you to make accurate commission forecasts, demonstrating how your business is doing and letting you plan accordingly.

How Optus achieved sales comp transparency with Performio

As an example of how to increase transparency, we can look to Optus, the second-largest telecommunications company in Australia. Realizing they needed to move away from spreadsheets for calculating sales commissions, Optus turned to Performio for a solution. In doing so, they were able to streamline their sales commission processes, improving transparency for sales reps, managers, and executives.

Facing sales comp challenges

Before using Performio, Optus faced the same challenges with compensation management that many other growing companies experience.

They had outgrown spreadsheets and their in-house solution. The commissions and operations team at Optus had been calculating commissions using a combination of Excel and their own in-house legacy solution. This worked when they only had a few sales reps, but by the time they decided to make a change, Optus already had 250 employees on the team.

They used complex commission plans that changed frequently. As the market shifted and evolved, Optus had to update their processes accordingly—adjusting commission policies and employee incentives to align with market demands. But their data model wasn’t flexible enough to keep up, resulting in problems in their sales management processes.

Their processes lacked transparency and were difficult to audit. Sales reps received their results only once per month via either a spreadsheet or a PDF, leaving them with no further insight into how their sales commissions were calculated. And Optus’s in-house solutions required different people to calculate commissions using different worksheets, making for a challenging trail to follow.

Optus needed a solution that offers scalability, flexibility, and transparency.

Starting with small changes

Optus decided on Performio to solve its challenges, trusting Performio to scale along with their business. That was important back then when they had 250 sales reps, and it’s especially vital now that Optus has grown to over 2500.

But implementing the right sales commission management platform didn’t happen overnight. Recognizing that it takes time, Optus started with the basics before moving up to more complex implementations. This meant focusing on the components within their control.

Optus’s first step was to simply replicate their commission calculations in Performio. Although this initially required them to continue manually loading the data, it immediately gave them the benefit of automated reporting and statements.

Improving efficiency via automation

Because the commission team no longer needed to manually send individual statements to every sales rep, they had extra time to improve their efficiency further by using more of Performio’s automation capabilities.

Optus had to be sure the data was robust enough to feed it into the system automatically. It’s important to address data source issues directly, ensuring the data is accurate at the source, rather than trying to correct it later after feeding it into the system.

By carefully taking things step by step, Optus was ultimately able to achieve dramatic gains in overall efficiency.

Providing transparency into sales comp data

Performio’s automated reports gave sales reps a detailed window into their performance and allowed them to confirm the commission results for themselves. This gave them confidence that their commissions were calculated correctly, and it made it easier to approach the commissions team if something wasn’t right.

They were also able to see commission calculations on a daily basis—rather than once a month. This allowed them to see their progress towards quotas and adjust their performance as necessary, leading to an increase in productivity.

Additionally, before finalizing the commission results, Optus would make the results available for two to three days to allow sales reps to review their final numbers. That gave both the commission team and sales reps enough time to ensure the data was up to date. If anyone found a problem, they had a chance to point it out and ensure the commission was calculated correctly.

Apart from providing transparency to the sales reps, it also provided transparency for the management and commission teams. They need to know they’re receiving accurate results and not overpaying.

Improve your sales comp transparency with Performio

As your company grows and your sales team expands, you’ll need a dedicated platform that scales with you. Performio automates your sales commission calculations, providing the flexibility and transparency you need.

With Performio, your sales reps will receive timely reports and leader-board rankings, keeping them motivated and performing at their best. For more than 15 years, we’ve helped hundreds of sales teams in dozens of industries, and we’re excited to work with you next.

To see how Performio can help your business, schedule a demo today.

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