In sales teams, the manager is responsible for overseeing the day-to-day operations of the team and ensuring that their direct reports meet and achieve designated sales goals. While they may not be out in the field themselves, they must stay up-to-date with market trends, the evolving needs of their target audiences, and feedback from their reps on how prospects are responding to current sales tactics and propositions.
This information helps managers develop sales strategies to better penetrate their markets, whether that’s based on a product level, a geographical level, or a demographical level. It is expected that they know their target audience well, and with data and insights, are capable of establishing tactics that help their team succeed.
Managers play a key role in creating the blueprint for their reps in the field, making sure that their reps have the tools they need to succeed, and motivating their team to meet the finish line for outlined sales goals. This is why many organizations factor in manager roll-ups into their sales compensation plan.
What is a Manager Rollup?
A hierarchical rollup, manager rollup, manager override, and upline commissions are all terms that describe the process in which a portion of a sales rep’s commission is given to their sales manager.
This calculation is handled differently across organizations. In some, it may be as simple as the company being willing to pay a total 12% commission for each sale – 8% of the commission goes to the sales rep for closing it and 4% goes to their direct supervisor.
Other scenarios can make it much more difficult to track. Say your company is willing to pay a total of 12% commission for each sale, but instead splits the commission down the middle, so half of the commission goes directly to the sale rep (6%), and the other half is split even further among the chain of leadership. This could mean that their direct supervisor receives 3% of the sale, the regional sales director receives 2%, and the VP of sales receives the remaining 1%.
Managing the Complexities of Rollups
As with everything involving commissions, the more variables, the more complicated the process can be. Below we’ll discuss some of the variables that make rollup commissions so complicated to calculate and how Core Commission can help manage them with automation.
Overlapping Roles and Teams:
Depending on how your sales teams are divided, you may have some reps that fall on multiple teams. For instance, if you have reps assigned to a product team which makes up a larger territory team. This could mean that the manager overseeing the product team receives a portion of the commission as well as the territory manager.
This scenario is configured both in Core’s rules engine and account management section. First, the appropriate hierarchy is assigned in the account management section, placing sales reps in the downline of managers above them. Second, rules are created that establish how commissions should be split for each level of the sales team.
Frequent Changes to Internal Organization Structure
Changes to organizational structures happen all of the time. People get promoted, territories shift, team structures evolve, and keeping up with these changes can be difficult, especially when they occur in the middle of a commission cycle. The last thing you would want to do is accidentally pay an override to the wrong manager; and details like that can be easily missed without proper tracking tools.
With Core, you can maintain a change history for each rep’s role at the company, creating an instant audit log in case you ever need to go back and verify. You can see the history for their role, what territories or groupings they have been assigned to, supervisors they have reported to, and the time periods relevant for each of these categories.
Performance Dependencies
In some compensation structures, a manager’s payout may be dependent on how their team performs as a whole. Meaning that instead of individual overrides for each sale, they may only receive one larger override once their team meets their outlined sales goals.
For example, say the manager gets 10% of the overall revenue generated by their sales team for the month. However, they only receive that commission if their sales team meets their monthly sales quota.
Tiered commission rates are created and managed in Core’s rules engine, and you have the ability to create different tier structures applicable to a given role. So, your reps and managers can each have their own tiered structure being calculated behind the scenes based on the performance dependencies that you have defined.
Automating Multi-Level Commissions with Core
As mentioned above, every organization will have different rules surrounding who qualifies for management rollups. With larger organizations, you will often find more complex rules on who qualifies for rollups, and how the rollups will be split among leadership. Regardless of how complex your reporting structure is or how complicated your multi-level commission tiers are, all you need to automate your rollups is to:
- Define Hierarchy: Who reports to who?
- Assign Commission Rates: What portion does each level get?
- Create Hierarchy Rules: What conditions need to be met for each individual to receive their cut?
That’s it! With Core, hierarchy rollups are literally as simple as 1-2-3. This three-point process is all included in the setup for your unique account, so after the initial implementation, you just need to sit back and watch as the calculations are handled automatically.
Schedule a demo to see how Core’s system is equipped to handle even the most complex hierarchical rollups seamlessly and with a completely automated workflow.