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 have two sales VPs with remarkably different team revenue quotas. One at $12MM/yr, the other at $20MM. To date we have targeted the same variable comp for each…
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.
Target Total Compensation (TTC) is the amount of pay that a role (not a person) is expected to earn at 100% of expected performance. This number is absolutely essential to developing sound compensation plans. Without it you will not know who is doing better than expected and who is doing worse. Compared to what?