Compensating sales personnel in a manner that rewards them appropriately and that truly provides an incentive to stretch to higher levels of performance is sometimes a difficult balancing act. Some business owners and managers are reluctant to structure sales compensation plans that could allow sales reps to earn significant incomes. I believe that it is important to build sales compensation plans that reflect the effort expended. For example, to pay sales reps a straight salary, with a small bonus or none at all, doesn't really take into account the rep's effort. But paying sales reps for achieving certain thresholds or targets and creating a significant payout for exceeding reasonable, but demanding, expectations provides for a direct relationship between effort expended and compensation. It is important to avoid paying sales reps on a "coupon clipping" basis (this simply means that reps are paid handsomely regardless of their performance). Developing a sound sales compensation structure is dependent on the type of business you operate. But don’t be afraid to pay sales personnel for overachieving. And avoid over-rewarding sales reps that don't stretch to reach high levels of performance.
Good Luck & Good Selling!
Russ
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1 comment:
I totally agree! Compensation plans should definitely reflect the hard work (or even lack there of) of the sales team. I know that for my employees, if they go above and beyond and just do a great job, they are always rewarded for it (I'm a huge fan of bonuses by the way). :)
Andrea B.
Sales Compensation
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