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Are there any design principles you recommend I use to differentiate between existing products to new customers and new business/new products?
Generally a sales comp plan may pay differently for new products or new accounts in order to recognize a few typical characteristics of these sales:
What type of itemization/documentation is an employer required to provide to sales people paid variable compensation?
There is no requirement to provide documentation in the US in most industries. You are free to provide additional compensation whenever you’d like, based on whatever criteria you establish (or change). However, to maximize the motivational value of your plans…
What do you consider to be the key principles are important in considering role-based incentive plans?
Role-based incentive plans are used to motivate and reward those who have a direct effect on company financial results, in both sales and non-sales roles. Keep these key principles in mind when designing a role-based plan…
How can I reward project managers who bring projects in on time and within budget?
This high-end residential remodeler wants to reward project managers who bring projects in on time and within budget. Given that they have a great deal of control over on-time, on-budget project completion, it was a great idea to provide them with incentives to make that happen.
Do you have any experience/insight into draw against bonus in the software industry?
If you referring to a bonus plan that is paid at year-end and is available broadly across the company to people in leadership and technical roles, then you should know that many technology companies do pay more frequently than once/year.
When should payout rates decrease, and why?
We generally recommend that rates decrease at a very high level of performance, well above goal. And the decrease should continue to hold the rate above the “base rate” (immediately below goal rate).
What are the advantages and disadvantages for paying for activities vs. paying for results?
In designing a sales comp plan, we strongly recommend paying for financially measurable results (as opposed to activities). Sales compensation, to be really motivating, generally involves significant cash and upside…
Our sales managers would like the flexibility to design a comp plan that rewards for different results in different quarters, but based on numbers.
This type of component puts the ability to very directly manage pay, including potentially managing upside, in the hands of sales management. The availability of this sort of management discretion to directly design incentive components and determine payout amounts generally results in widespread direct management of pay levels and a decoupling of payout amounts from market value and productivity.
When is it appropriate to measure results generated by a team rather than just results generated by an individual?
Often we are asked about how to provide incentive compensation for team results. The key principle here has to do with how the sales are made. Do the team members depend on each other to be successful?
Incentive plans for inside sales can be complex, depending on the situation, what should I be on the lookout for?
Before diving into a plan design for inside sales, you must first answer two questions: (1) What type of inside sales are they doing? (2) Do they qualify for the 7i exemption or are they non exempt employee?