In the third part of this series, we will discuss the other aspect of the centralization process. HQ prefers to create a global incentive compensation plan design and structure. This may be considered as taking a “framework” approach from which regions and countries may pick from a menu of plan components.
In the final part of this series, we are going to discuss centralization of ongoing IC operations and change management processes. In effect, a global Center of Excellence (CoE) is created to handle incentive compensation needs of the organization globally. The objectives are: to gain operational efficiency, remove variability in system deployment, provide best practice guidance from the center, and to reduce overall operations costs.
This aspect of centralization is most likely to have the greatest pushback amongst the three aspects considered in this series. Primarily this emanates from the feeling that it separates the IC administration from the local market and local leadership. This may also be perceived as lacking transparency and may impact field relations with local IC admin personnel. The preferable approach to tackle this aspect would be to create a global framework for management and governance of the operations and changes. This framework sets an operational paradigm within which each geography needs to manage their IC operations locally. It also embeds a healthy level of governance and rigour. This operational paradigm should include aspects like:
Operational Quality Framework
Change-Management Governance Structure
Such an approach which provides a broader operational framework but allows individual regions (where appropriate), and of course country affiliates to manage their own operations is more desirable.
In this approach, individual country affiliates are required to identify local process owners, define their responsibility matrix (RACI), perform IC plan administration using SOPs, act as a liaison for the local sales teams and take the lead with any queries including dispute resolution. They are also required to track operational KPIs and report them to the HQ.
This approach empowers the affiliates to take complete ownership of their IC program and results in better relationships between sales operations group and the sales team as well as with HQ. It also drives the sharing and adoption of best practice, process improvements, efficiencies and financial savings across the organisation.
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