Report: The 2025 State of Incentive Compensation Management

Growth. Productivity. Efficiency. These aren’t just buzzwords — they're critical to success in today’s  macroeconomic environment.  

In fact, 59% of companies are leaning on their incentive compensation programs to help drive growth this year. But there's a wide gap between implementing an incentive compensation plan and executing an effective one that, ultimately, drives growth. 

The priority for most incentive compensation teams is supporting business growth and increasing seller productivity. The good news: strategic incentive compensation programs can be incredibly effective in driving business growth. 

However, many businesses are struggling to turn their incentive spend into that strategic lever. Rather, they’re held back by: 

• Lack of automation – only 27% have automated the commissions process end-to-end, with reporting and analytics, commission calculations, and data integration and management perceived as the areas that would most benefit from automation.
• Lack of visibility into compensation program ROI – many businesses are currently experiencing difficulty:
  
  • Identifying which levers to pull to strike the right balance between growth and spend..
  • ..getting executive buy-in for improving the current system.
• Lack of accuracy – almost half of participants saying they have both overpaid and underpaid on commissions in the past year.
• Lack of confidence – only 30% of leaders saying their compensation strategy is very prepared for economic shifts and market volatility.

Yet, incentive compensation remains one of the most reliable levers to drive growth, aligning rewards to performance, cross-functional priorities, and long-term impact. In fact, the most forward-thinking teams are expanding the power of incentives beyond sales, analyzing performance and adjusting plans as needed, and aligning incentives directly to growth. 

In our 2nd annual Incentive Compensation Management Report, we explore how companies are using (and misusing) incentive compensation programs — and how the right approach can unlock measurable gains in efficiency, accuracy, and performance.

This report shows that incentive compensation can (and should) be managed not merely as a cost center, but as a strategic approach to driving growth, motivating sales teams, and achieving key business objectives.