Global Capability Centers (GCCs) are no longer just back-office hubs focused on cost savings; they are evolving to drive productivity, innovation, and talent development for global pharma companies. As GCCs take on a more strategic role, they’re increasingly tasked with managing operational functions—like incentive compensation (IC)—that directly impacts sales force performance. However, setting up an effective IC practice within a GCC requires consideration of key factors such as choosing the right service model, ensuring talent retention, investing in technology integration, and navigating regulatory compliances.
This brings us to the critical question of how organizations can really get started with internalizing and operationalizing IC capabilities within their GCCs.
Why It’s Time to Rethink Your Current Incentive Compensation Approach
Field reps continue to be the linchpin of product success for pharma companies, and that is why incentive compensation remains a powerful tool for motivating field force and encouraging the right behavior. It’s quite straightforward: thoughtfully and well-designed IC plans can significantly influence field force performance. On the flip side, poorly managed IC programs risk discouraging the reps, leading to missed opportunities.
Managing incentive compensation programs on a global scale, however, presents notable challenges. Local differences in IC practices often lead to inconsistent payouts across regions. Differing human resource policies and labor laws, which require careful alignment, further add to the complexity.
Then there’s the need for frequent recalibrations—from goal shifts due to evolving data and eligibility changes to quarterly readjustments. With so many moving parts, implementing a cohesive, global incentive compensation strategy is no small feat.
The Right Move? Integrating Incentive Compensation within Your Global Capability Center
A GCC-led incentive compensation practice can deliver significant benefits for global pharma companies by creating a streamlined approach to incentive compensation management. Here’s how.
Fair and consistent IC across the globe: By implementing standardized or "glocalized" IC principles though
global capability centers, you can ensure fair and consistent compensation worldwide. This approach addresses
regional pay disparities that arise from differing incentive models and the influence of local operations teams.
Increased efficiency with a unified team and technology: With a single, unified team and technology platform managing IC within a global capability center, it is easier to streamline global processes and make them tightly aligned with company goals across borders.
Clear stakeholder management across regions: A centralized incentive compensation management approach ensures everyone stays informed and aligned with the compensation strategy. This clarity enables stronger relationships and better support from country-level teams.
Incentives aligned with company performance and market needs: When global capability centers integrate IC practice, incentives can be directly linked to overall company performance, reinforcing behaviors that align with dynamic market conditions.
Factors to Consider When Setting Up Global Capability Centers with Incentive Compensation Capabilities
Companies need to consider the following strategic steps to set their GCCs up for success.
Choose the right service model (e.g., fee-based, SLA-based, value-based, or outcome-based) enables GCCs to meet diverse stakeholder needs while staying aligned with business goals.
Identify key roles and choose the best procurement strategy—buy, build, outsource, or contract talent—to meet your business needs.
Invest in unified systems for data handling, IC processing, and reporting to streamline operations and maintain consistency across regions and business units.
Enhance technical skills and capabilities to bring in efficiency in cycle time and eliminate errors.
Have a well-designed team structure and operating model. This approach enables teams to efficiently handle day-to-day operations, address incoming requests from business units and the field, and ensure that each team member is optimally utilized throughout the year.
Successfully Operating Global Capability Centers with Incentive Compensation Capabilities
Here are some tips to get you started.
Standardization
Operating a GCC with robust IC capabilities requires a balance of global consistency and regional flexibility. Standardizing IC structures across regions promotes fairness, particularly when employees in similar roles are assessed against common benchmarks. However, this consistency must be adapted to each region’s cultural, market, and legal specifics—a “glocalized” approach.
Key Performance Indicators (KPIs)
To ensure efficient GCC operations, clear and measurable KPIs should guide performance, especially in collaboration with departments like Business, Sales, HR, IT, and Finance. These KPIs should align with GCC objectives to enable the delivery of accurate & timely compensation results.
Data Analytics
Data analytics allows GCCs to make data-driven decisions that align incentives with organizational goals. Regular assessment of incentive compensation program effectiveness helps in refining strategies to keep IC plans relevant and motivating.
Talent
Rather than strictly managing full-time equivalents (FTEs), global capability centers should focus on maintaining a skilled talent pool to fill key roles.
Risk Management
Governance mechanisms must be in place to avoid over-promising or errors in incentive plans. This can help reduce the risk of employee dissatisfaction, legal issues, or financial inaccuracies.
Transparency
Employees should understand how incentive plans work, what metrics will be assessed, and how compensation is determined. This clear communication not only builds trust but also ensures employees know how their contributions are valued and rewarded.
Incentive Compensation Evolution: How Can Global capability Centers Stay Ahead
Pharma companies are building integrated customer experiences across digital and in-person channels. At the heart of this is the field rep, who manages clear communication with customers. With frequent digital interactions and evolving customer needs, reps now support dynamic promotion planning, which are guided by next-best-action recommendations. And given their expanded role—from driving prescriptions to orchestrating engagement—tying incentives to these added responsibilities is undoubtedly essential.
Meanwhile, incentives are no longer just about sales numbers. Companies are starting to reward reps for efforts that support broader growth strategies, like go-to-market initiatives. Many are even using AI to assess performance, combining HR insights with on-the-filed performance to get a broader view of each rep’s impact.
So, How Do You Stay Ahead?
In a GCC set-up, companies must go beyond operational teams and develop thought leadership to stay ahead and drive better ROI—boosting motivation, performance, and compliance. Hence, a part of your incentive program should actively focus on supporting innovation and creating solutions that align with modern incentive compensation strategies.
A Success Story
A leading global pharma company with a strong biosimilars and generics portfolio sought support for its Incentive Compensation (IC) Center of Excellence. Indegene took a comprehensive approach for managing end-to-end IC activities, including incentive compensation design, operations, diagnostics, and communication with stakeholders across 20+ countries.
We conducted semesterly reviews to showcase process improvements and update documentation. Our ongoing monitoring also provided valuable insights, addressing analytics queries like the impact of attrition on IC payouts.
This approach resulted in a 25% reduction in process time to significantly accelerate payroll delivery. Additionally, country stakeholder engagement scores rose by 2 points.
Conclusion
Adding incentive compensation to global capability centers helps pharma companies drive better field performance and streamline operations. It brings fairness and consistency to incentives program globally, and help align rewards with what really matters. For pharma companies, investing in incentive compensation through global capability centers is surely a practical move for staying competitive.