Wired for Growth: Rachel Parrinello on How the Best Comp Teams Are Leaving Reactive Operations Behind

Our Experts on the State of Incentive Compensation Management Q&A series brings together leaders across compensation, operations, and Go-to-Market (GTM) functions to discuss the biggest challenges, trends, and opportunities shaping incentive compensation. Today’s edition explores the findings from CaptivateIQ’s 2026 State of Incentive Compensation Management Report.

For this conversation, we sat down with Rachel Parrinello, principal at Alexander Group, a GTM consulting firm. Rachel joined the firm in 1999 and has spent decades helping organizations navigate shifts in sales compensation, revenue strategy, and GTM planning. 

She also participated in CaptivateIQ’s recent webinar on the report findings, where she discussed the operational, technological, and organizational changes reshaping incentive compensation. Watch the webinar recording for additional insights and analysis.

Here’s her perspective on how compensation teams are adapting to growing complexity, changing market dynamics, and rising business expectations.

Per this year’s State of ICM report, whopping 78% of organizations report at least one measurable consequence of misalignment between planning and comp. In your experience, what separates the most effective sales compensation programs from the rest?

At Alexander Group, we’ve conducted a sales compensation survey for 23 years. One of the questions we consistently ask is how effective companies believe their sales compensation plans are on a scale of one to five, with “very effective” as the highest rating. Year after year, only about 20% of organizations rate their plans as very effective.

That number always surprises me. On one hand, as a consulting firm that helps organizations design compensation plans, it means there’s still a lot of opportunity for improvement. On the other hand, it’s frustrating because incentive compensation is one of the most powerful tools companies have to drive strategic growth.

The challenge is that it’s not getting easier. Markets are more volatile. Product, service, and pricing models are becoming more complex. Routes to market are evolving. Businesses are managing constant change, from economic uncertainty to increased competition. 

Everything about GTM execution is becoming more complicated, which means organizations have to work even harder to become part of that top-performing 20%.

We recently studied what those top-performing organizations are doing differently and identified five common themes.

1. They establish a clear set of compensation philosophies and guiding principles that serve as a north star for decision-making. 
2. They develop a deep understanding of their growth strategy and the specific roles their compensation plans are designed to support.
3. They invest in strong internal expertise across plan design, operations, technical infrastructure, stakeholder management, and process execution. 
4. They build disciplined governance structures with clear ownership, workflows, and operational processes.
5. They prioritize effective change management. Compensation impacts people personally. It affects how they pay their bills, support their families, and plan their lives. Organizations have to communicate changes carefully and execute them thoughtfully if they want to maintain trust while evolving their programs.

Improving accuracy is a top priority project this year, according to 50% of comp leaders. In your experience, where should organizations start? What tends to break down first: data, process, or tools?

It usually starts with data. At the end of the day, it’s the classic “garbage in, garbage out” problem. Organizations need reliable data to make good design decisions, support fair payouts, and drive trust in the compensation process.

You also need alignment around what the data actually means. Otherwise, teams walk into meetings arguing over different versions of the truth. One group says renewal rates are 80%, another says they’re 90%, but everyone is working from different definitions or data sources.

That challenge has only grown more complicated over time. Compensation teams are pulling information from HR systems, CRM platforms, order systems, product hierarchy data, and other sources across the business. For larger organizations with complex portfolios, all of that data has to come together correctly to support a compensation plan that aligns to the company’s growth strategy.

The next issue is process. Even with good data, weak governance and unclear workflows create delays and friction. In our last survey, 81% of organizations said they need to improve governance and operations around sales compensation. That includes clearly defining workflows, responsibilities, approvals, and timelines.

Sales compensation is inherently cross-functional. Finance, sales operations, HR, and sales leadership all need to be aligned around the final plan design. When that collaboration breaks down, organizations fall into the blame game. Finance blames sales operations. Sales blames finance. Teams point fingers instead of solving problems together.

Tools come last, because tools are ultimately dependent on both the quality of the data and the strength of the underlying processes. Even the best technology can only work with the systems and workflows surrounding it.

That said, many organizations are still working with outdated systems that require heavy programming, manual coding, and significant administrative effort just to make changes. Those limitations make it difficult to respond quickly when the market shifts or the business evolves.

I think AI is going to help accelerate a lot of this. It has the potential to make compensation operations more agile and help organizations adapt faster to changing business needs.

We found that 81% of GTM professionals use AI, but only 28% mean it. For those that might want to increase their AI adoption effectively, where are you seeing AI have the biggest impact on planning and compensation today?

We do a lot of research across GTM functions, including marketing, pricing, sales, customer success, and service. One of the interesting things we’ve seen is that marketing is leading the way in AI adoption by a wide margin. In some cases, nearly 60% of organizations are already embedding AI deeply into their marketing workflows.

Sales compensation, on the other hand, is still much earlier in the journey. That aligns closely with the statistics we’re seeing across the market. Part of that is because organizations naturally look for lower-risk, high-ROI use cases first. Compensation is different because accuracy and trust matter so much. Companies can’t afford bad payouts or unreliable calculations.

That said, there’s still an enormous opportunity for AI within compensation workflows, especially as organizations connect compensation to upstream planning activities like territories, quotas, and ICP data.

Right now, one of the most common AI use cases in sales compensation is training and content development. We’ve seen adoption in that area grow significantly year over year. Beyond that, organizations are increasingly using AI for data analytics, insights, budgeting, forecasting, and costing.

One area I find especially interesting is seller assistance through AI-powered chatbots and agents. Today, that may look like a seller asking questions about their compensation plan, payout details, or program terms and conditions. But longer term, I think the vision is much bigger.

Sellers are already working across 7 - 10 different tools every day. The future is likely a unified assistant that connects all of those workflows together. A seller could ask, “Which accounts should I prioritize this week? What messaging should I use? How will that impact my quota attainment, crediting, and compensation?” That kind of connected experience could fundamentally improve seller productivity.

We’re also seeing new roles emerge because of AI. One example is the rise of the “go-to-market engineer” within RevOps organizations. These individuals combine operational expertise with coding and AI capabilities to help build and manage integrated workflows across the revenue organization. According to some of the research we’ve reviewed, job postings for these roles increased dramatically between 2024 and 2025.

There’s often concern that AI will eliminate jobs, but history shows that new technologies also create entirely new categories of work. We’re already seeing that happen here.

Beyond seller-facing experiences, AI also has the potential to improve operational efficiency inside compensation organizations. Things like no-code plan updates, faster workflow changes, automated data cleansing, and more agile system management can dramatically reduce administrative burden and help compensation teams respond more quickly to changing business needs.

It’s an exciting moment for the industry, and I think AI will ultimately help organizations build more effective compensation programs that better support their growth strategies.

We found that seven of the top 20 predictors of a company’s preparedness are tied to AI capabilities, signaling that AI is increasingly becoming a differentiator for compensation teams. Is that what’s driving this shift toward greater AI adoption?

A big part of the push for AI adoption is the growing expectation that compensation organizations are agile and responsive to shifting business conditions. Increasingly, there’s pressure coming directly from the top to figure out how AI can improve productivity and operational efficiency.

We’re also seeing organizations become more disciplined in how they approach AI investments. Last year, many companies were in experimentation mode, testing a wide range of use cases and trying to understand where AI could fit into their workflows.

This year, the mindset has shifted. Companies are becoming more selective and focusing on fewer use cases with stronger, more measurable ROI. It’s less about breadth and more about depth. Organizations want to invest in the areas that will have the greatest impact, whether that’s improving efficiency, accelerating growth, or increasing organizational agility.

For compensation teams specifically, my advice is to focus on the use cases that solve meaningful business problems first. Rather than trying to apply AI everywhere at once, identify the workflows where it can create the most value for your organization and double down there.

The companies that seem to be ahead are the ones taking a strategic approach. They’re not adopting AI simply because it’s a trend. They’re aligning it to business outcomes and using it to help their organizations move faster, operate more efficiently, and support growth more effectively.

Payee trust in accurate compensation is the third-highest predictor of organizational preparedness. Among organizations where payees have “very high” trust, 55% are very prepared for market volatility. Given how foundational trust is to organizational performance, what signals should GTM leaders look for that trust may be eroding within a compensation program?

The signals you look for are more claims and more disputes. Not just inquiries around how the plan works, but disputes about crediting and calculation mistakes.

You also start to see undesirable turnover and loss of productivity. 

[BLOCKQUOTE
| Quote: Loss of trust ultimately leads to loss of hope, and that’s what can drive undesirable turnover.
| Author: Rachel Parrinello
| Title: Principal, The Alexander Group
]

Many organizations are moving from “reactive” compensation operations built on manual workflows and spreadsheets toward more “wired” environments where planning, compensation, and execution are connected in real time. What’s the hardest part of making that jump?

First, I’d say being in the reactive stage is very dangerous because organizations are usually relying on a single point of failure, whether that’s one person or just a handful of people holding everything together. If someone leaves the company or even gets sick, the whole process can break down.

The best thing to do is document your processes, procedures, and workflows so you can automate them effectively. The second piece is cleaning up your data and connecting siloed data sources so there’s consistency across the organization. If the systems aren’t connected, it becomes very difficult to operate efficiently or scale effectively.

And underneath all of that is budget. Companies need to build the business case for why these investments matter and connect them directly to growth strategy. At the end of the day, organizations need productive sellers, and they need to attract and retain top talent. That requires best-in-class sales compensation operations.

If you think about most companies, sales compensation is one of the largest costs within the sales and marketing organization. That’s why it’s so important to get it right.

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If you’re interested in participating in one of the Multiplier Q&A features, or have burning questions to ask today’s ICM leaders, let us know at multiplier@captivateiq.com.