In putting together a pay structure for a sales team, the first step is to establish the right total cash compensation for the role. The next step is to decide how much goes into the base pay (/salary), and how much into the variable incentive pay at target. The main determinants of pay mix are market practice and sales role prominence.
Should we be using our standard annual merit pay adjustment process with our sales team’s base salaries, or should we just expect them to earn their own raise through increased sales?
We need to offer a more meaningful incentive, but our base pay levels are too high. How do we make the transition?
If you’re going to have base pay, manage it, varying base pay levels to differentiate among people based on value-creating attributes that don’t change year over year.