Several factors needs consideration when justifying investment into an incentive compensation solution as they may have impact on the selling time, motivation etc. Aurochs has created a standard model for calculating cost of using an ineffective incentive compensation management system which you can tweak to your business situation. Use it to estimate the cost impact of using an inefficient IC system and build your business case for implementing an industry standard solution around it.
SOX and it’s equivalents (EFPIA code) require companies to establish, document and adhere to internal financial controls and proactively report on any gaps. The primary objective of compliance is to increase financial transparency and accountability by assigning responsibility to executive leadership and board members.
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 this part of the IC Centralization series, we will focus on the strategy to create a global incentive compensation plan framework and drive the design process from HQ.
In recent times we have seen an increase in calls for greater geographic centralization in the Incentive Compensation function within global pharmaceutical companies. The aim generally is to strive towards HQ driven incentive compensation administration and defragment IC management across geographies within the organization.