1. Implementing Incentive Compensation
  2. Considerations for Setting Up Business Units in Incentive Compensation

Considerations for Setting Up Business Units in Incentive Compensation

There are many factors that impact how you set up your incentive compensation business units for your global enterprise structure. These factors include incentive compensation plans, data security, incentive processing, and reporting.

Incentive Compensation Plans

Plan factors that impact how to best configure your business units include commonality across the organizational hierarchy as well as quantity and complexity of plans.

Examples:

  • At which level do you use common incentive compensation plans: country, division, region, or global?

  • Do your compensation plans use common components, expressions, and performance measures at the country, division, region, or global level, or is each plan independent?

  • How many different compensation plans do you use for each business unit?

  • How complex are your compensation plans?

  • Are your plans similar enough that you could use personalization of incentive plan data to handle the minor variations?

You can individualize many compensation plan values for participants, which can reduce the number of plans that you actually have to create and manage. Level of complexity also affects the quantity of plans you create, and in which business units it would be most efficient to create and maintain them.

Data Security, Processing, and Reporting

Be sure to consider how you want to constrain data access and visibility as well as incentive processing.

Examples:

  • At what level do you want to secure data: by line of business, division, country, or globally?

  • Is your processing centralized, or do individual business units or regional centers perform the analyst function? Do they only work on their participants or is work pooled?

  • How do you want to report on your business units and divisions?

You can process transactions across business units and teams. Set a global operating currency and process incentive compensation in local currencies or using a global currency. You can introduce global sales teams and structures at any time, without changing your enterprise structure model.

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