Budget and planning season is upon us, and as always, it’s bringing a renewed focus on compensation. For the banking industry, changes to incentive compensation management policies can offer insights into what strategies can shape compensation practices for the entire industry.
In the heavily regulated financial industry, keeping up with compliance requirements can be challenging—making plan design, visibility into plans and the auditability of the compensation process important considerations. For a look at how financial institutions are adjusting to the modern banking environment, learn how Zions Bancorporation is not only surviving but thriving in an era of heightened scrutiny.
For primary decision makers in banking institutions, asking the following questions cannot only help ensure regulatory compliance but also give senior managers a level of oversight of incentive compensation plans that help them drive long-term profitability and growth:
- Do you have full visibility into your compensation processes?
When sales leaders have visibility into the whole sales organization, they can connect with representatives through a knowledge of their products and quotas, allowing them to effectively drive performance. Having visibility means knowing who your top performers are—as well as who’s underachieving. Most important, visibility lets you see red flags when problems arise with sales rep behavior or plan design, helping you react quickly and efficiently.
- Are your compensation plans encouraging the right behaviors?
Plan design is of the utmost importance because salespeople do what they’re incentivized to do. Accordingly, you’ll need to ensure that your plan drives the behavior that you want to see. Just imagine, for example, what behavior you might be encouraging if you set sales quotas too high. Not surprisingly, some financial institutions are doing whatever it takes to assure customers that the bank is acting in their best interest. This common goal in the industry goes hand in hand with the aim of selling as much as possible while maintaining corporate values.
- Can you fully audit the compensation process?
Organizations that are striving to meet governance and compliance requirements need to provide a single view of the compensation plan portfolio while implementing data access restrictions and ensuring auditability. Consider whether your own audit trail is complete: does your system automatically track every change and event? Can you easily and accurately trace every commission payment to its source? You can imagine what problems might arise if the answer to either of these questions is no.
Selling—and compensating your sellers—is a complicated endeavor, but choosing the right sales performance management solution helps you rise to meet that challenge. Read the flipbook Transform Compensation Management to Boost Results and Mitigate Risk in Banking to discover how the IBM Incentive Compensation Management solution helps your organization mitigate risk while maintaining regulatory compliance.