Managing sales compensation in 2021 will require collaboration across disciplines, a willingness to make assumptions and adjust later, and an agile sales and compensation management process.
With little understanding of the extent and duration of the unfolding situation, how should sales compensation plans be adjusted, and when?
A sales compensation design effort yields results in three areas: revenue increase, margin improvement, cost of compensation in relation to sales productivity. Be sure you know why you are changing your plans and what you hope to accomplish, and your plan design will be much more likely to yield improved results.
The difference is that the “commission” is communicated as a “piece of the action,” whereas a “bonus” is a fixed incentive amount offered for achieving a specific objective. Commissions and bonuses both have their place in sales compensation plans – but knowing when to use which one can be a bit tricky.