An Incentive Compensation Management Solution won’t Solve all your Problems…

An ICM Solution won’t solve all your Problems… This may sound like a strange statement coming from a compensation consultant. The truth is that many compensation management application vendors often pitch their product as being a solution for all compensation related issues; while it is true that a solid ICM solution will provide the right tools, these tools alone are not enough to warrant success.

The right people will be required to customize, implement and manage a compensation solution. Even in the case of an on-demand solutions implemented by a vendor, the right people will be required to communicate the requirements and to manage the system. If incentive compensation is new for a company, someone will need to be able to answer questions from payees (employees receiving the incentives). If the ICM solution replaces a home grown system, a spreadsheet or some other solution, there will be a learning curve for everyone involved; the ICM team will need to learn new tools, and payees will need to understand new reports and the impact of incentive compensation on their total compensation package.

Also, clients often fail to understand that their initial problems are usually not only caused by a bad solution; the root cause of the issue is usually bad processes. Those processes are often poorly documented, and the associated knowledge and expertise lost. To be successful with a new compensation system, it is important to understand existing processes, understand how the ICM solution will impact those processes, and more importantly, be able to adapt and accept process changes.