Majority of U.S. Employees Say Incentive-Based Pay Motivates Them at Work; Lack of Trust Can Have Adverse Effect

New survey from CaptivateIQ showcases how variable compensation can be a performance driver, but exposes disconnects between employee expectations and employers’ ability to deliver timely, accurate payouts

CaptivateIQ, a leading incentive compensation management (ICM) solution, unveiled the results of its Compensation & Motivation Pulse Survey, which explores how commission-based pay impacts employee motivation and performance.

CaptivateIQ recently surveyed 1,000 commissionable U.S. workers across go-to-market (GTM) functions to better understand the impact of incentive compensation and the role commissions or bonuses play in job motivation and satisfaction. The research found:

• Commissions and bonuses inspire employees to do better work and remain satisfied in their roles. 57% of respondents say working for commissions or bonuses motivates them to do a better job at work, and over half (52%) say it motivates them to hit their goals. Furthermore, 44% of respondents say it improves job satisfaction and 43% say it makes them feel more engaged at work.
• Timely and accurate payouts boost motivation. When asked what improves their motivation at work, 59% of respondents said having confidence that commissions are calculated accurately, 53% said timely commission payouts, and almost half said visibility into payout calculations and potential earnings.
• Employees’ ideal pay structure is a combination of commissions and salary. That’s according to 61% of respondents, further highlighting how variable compensation can be a driver for improved revenue performance, especially if incentives are closely aligned with company goals.

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“Incentive compensation can clearly be a powerful lever for job satisfaction and performance,” said Mark Schopmeyer, co-founder and co-CEO of CaptivateIQ. “However, with incentive compensation often being the largest go-to-market expense, we would ideally see that 100% of the commissionable workforce is motivated by incentives. Digging deeper into the survey, we found that lack of trust is a major detractor in the effectiveness of incentive compensation programs.”

Despite the positive sentiment around commission-based pay, the survey exposed disconnects between the factors that drive motivation – such as having confidence that commissions are calculated accurately – and employers’ ability to instill trust and ensure that payouts are made correctly and on time, including:

• Employees lack confidence in the accuracy of their commission payouts. Less than half (47%) of respondents are completely confident that their commission payout is always accurate. Over half (55%) have questions most or every pay period about how their payout was calculated. A vast majority (85%) said they manually recalculate commissions at least some of the time to confirm payout accuracy, taking valuable time away from more lucrative revenue-generating activities.
• Any mistrust over commission payouts can negatively impact job motivation. 45% of respondents said delayed commission payouts would negatively impact job motivation, and 41% said a lack of visibility into how payouts are calculated would do the same.
• Yet employers are not doing enough to instill confidence and trust. 44% of respondents said they have been paid late for a commission or bonus, and 34% said they have been underpaid. 34% said they have been unclear about what a commission payout should be and nearly a quarter said they were not paid a commission or bonus when they thought they should be.

“The bottom line is that organizations can’t just set and forget commission plans. Enablement, clear communication, and transparency is key. The best incentive programs are strategic in nature, inspiring the right GTM behaviors at the right time to derive the best possible outcomes for both the employee and the business,” added Schopmeyer.

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