Incentive, Compensation and Sales Performance Management

Testing is a quality assurance process required to ensure the system works as expected and as defined. I never met anyone who found testing “sexy”, fun, or even interesting. However, it is essential!

No matter how well designed the compensation plans are, if the commission and bonus results are not correct, the implementation will be a failure. We discussed that it is important for payees to be able to correlate their rewards to their performance, but mistakes could prevent them from doing this efficiently. Another result of “bugs” or system defects will be an increased number of complaints from the payees which will consume the compensation team’s time. These errors will also add confusion, making sales people unhappy and ultimatly lead to a lost of confidence in the system.

Traditionally, testing was a task done only once the entire implementation was completed; you built the system, you tested it and you rolled it out. This is one of the best recipes for failure. Test planning should be done at the very beginning of the project and testing performed throughout the development of the system, until it is rolled out.

Testing an ICM system is particularly challenging because of the volume of different cases. A “standard” software system testing may have a test that if a button is clicked, an action will be performed. With an ICM system, every plan, every rule, and every formula should be tested. For example, if there are four quarters, each quarter using its own rate table, each rate table having 8 tiers, and each tier corresponding to a formula, there will be 32 individual formulas to test – 32 test cases.

In my next posts I will discuss many testing related topics including the different test phases, how to create proper test cases and test plans, and how to review results in Excel and in Access.