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Commission
Two US states rule commissions are earned when an order is obtained…
Paying commissions only when the customer has paid – this may not work any more in some states. Illinois and Maryland have awarded commissions to terminated employees for sales that were booked before they left, but for which payment from the customer had not been received.
What is the difference between a commission and a bonus?
The difference is that the “commission” is communicated as a “piece of the action” (e.g., 2% of revenue, $5 per unit, 6% of margin dollars); whereas a “bonus” is a fixed incentive amount offered for achieving a specific objective, often with less offered for lower achievement levels and more for higher levels.
If a Territory Manager is a “Hunting Farmer,” How Should Their Comp Work?
While many established sales organizations use the hunter-farmer model as their sales force organization model, there are inevitably geographic territories or customer segments that do not justify both “hunters” and “farmers’…
Plan documents move from Best Practice to Legally Required in California
California, a state already ahead of most in regulating calculation and payment of sales commissions, has put into law the requirement to document commission plans in writing effective January 1, 2013.
If a sales person is retiring do we “buy out” their future commission stream?
Who really “owns” the commission stream? Did the sales person create it single-handedly, or was it the result of a great company offering, solid strategy, and a repeatable selling model?
Why should I pay incentives to my employees when the company has not hit its overall goal?
This is a common question, especially for smaller companies, whose resources are limited. It’s certainly understandable for a manager to want to develop an incentive plan that only pays out of the company profits (if there are any).
Communicating to Sales Professionals
Sales Compensation Quarterly, November 8, 2009 – Communicating changing sales compensation plans is never easy. The salesforce will always start with the assumption that the new plan is going to take something away from them, and will be skeptical of anything the company tries to push as a “positive change.”
My employer thinks I made TOO much last year therefore he has a new pay package for me which caps my sales commission!
No caps. We rarely recommend a sales comp plan be capped – no need to take your top performers’ motivation out. But we do recommend deceleration at high levels of attainment, per-deal caps, caps on the % of margin on a deal that may be paid to the rep, etc. – these keep pay rational…
Keys to Success: Six Areas to Address in Your Next Sales Compensation Plan
Workspan, August 27, 2010 — It’s fall again, the economy appears to have shifted toward the positive in many sectors, and companies are thinking about redesigning their sales compensation plans for 2011. In order to ensure the redesign process and resulting plans will provide a good return, businesses should address six key areas.
What is a fair commission to pay for setting appointments?
It’s probably best to start with the total comp needed to attract the right kind of people into the role, and a reasonable number of appointments they should be able to set…