Conversations on incentive compensation: The changing role of finance in pay for performance

The changing role of finance in “pay for performance” functions

As companies reevaluate their compensation strategies in
order to adapt to changes in the economy and business
landscape, a broader view of “pay for performance” is being
considered across business units. No longer just a function of
sales, optimizing performance is becoming a priority
consideration of finance. With a keen eye on margins, finance
requires close collaboration among business units to keep costs
and sales at a steady pace and “pay for performance” modeling
provides a ripe opportunity to address the Chief Financial
Officer’s (CFO’s) growing need for strategic planning.

A recent research report, “Managing Sales Incentive
Compensation Amid Uncertainty,” released by CFO
Research Services reveals that finance executives are taking a
keen interest in how their companies can motivate
sophisticated sales behaviors.They are exploring things like
team selling, cross-selling, as well as tying incentive
compensation to more complicated metrics like profitability,
customer satisfaction and repeat business. CFOs are no
longer focused on the top line results of their sales team;
instead, they are developing sophisticated incentive plans
that can motivate behaviors in a complex, competitive
business environment.


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