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Plan provisions
If we have a reduction in force, do we pay terminated employees their variable pay?
It’s important to think carefully about the message you’re sending to your other sales people, other employees, investors, and prospective future sales people. A couple of case examples…
Should sales representatives receive incentive compensation payments while on a leave of absence?
For incentive compensation payments during a leave of absence, think about when the work is done vs. when the payment is made.
Why would I pay incentives to sales reps when the overall company is not hitting its goals?
Making Your Numbers…Better Newsletter, September 2010 – Should you pay incentives to sales people if your company is not hitting its overall goals? Yes, if that incentive pay makes up more than just a token year-end bonus.
Incentive Plans Must be Well-Documented to Prevent Costly Confusion
The Logistics Journal, March 2010 – The joke goes that the majority of incentive plans are drawn up by the company president and sales director hastily over cocktails and written on a napkin. While most incentive compensation plans have a bit more thought put into them than this…
Are claw backs legal when the account is past due?
Our small sales team is paid 100% commission on gross margin. Sometimes, we claw back commissions that were paid after the customer is past due and in collections, is this legal?
Reducing sales compensation for bad debt
How do most companies handle sales compensation when there is a write-off for bad debt. Do they charge them back on the cost the company is out, or the gross profit they would have made if the customer paid?
Should the cost of customizing our product be deducted from sales credit?
For busiensses that feel sales compensation support is needed to manage the cost of customization, the following approaches are prevalent…
An account may become past due after commissions are paid. What are the options?
Sometimes customers return products, or they just don’t pay. As a result, some companies do a charge back on commissions paid to the sales person on the sale. The legality of this practice can vary…
What is considered “best practice” with regard to payout eligibility and employment status re: incentives and contests/SPIFFs?
My answer is different for contests and SPIFFs than for core incentive components. For core components, give some thought to what you’re trying to accomplish with your eligibility requirements…