Sales Comp for Support Staff: A Cautionary Tale

Posted by Chad Albrecht on Mon, May 07, 2018

As I ponder 20 years of sales compensation work, I’m seeing history repeat itself—specifically, the idea of sales support roles being on a sales compensation plan.


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How United Gambled (and Lost) on a Lottery Incentive

Posted by Steve Marley on Thu, Mar 08, 2018

On Saturday, I read a news story that described the new incentive program at United Airlines that would replace employee bonuses with a lottery-style program. The author clearly wasn’t in favor of the new incentive idea, referring to the news as “unfortunate” and mocking United’s description of the new lottery program as “exciting.”


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Back to Basics: Incentive Compensation Plan Periods and Payout Frequency

Posted by Chad Albrecht on Thu, Oct 02, 2014

The majority of companies follow an annual incentive plan period for salespeople.  This is likely for multiple reasons.  First, executive compensation and broad-based compensation programs – two additional categories of compensation programs – are almost always annual.  For consistency, companies place salespeople on annual plans, as well.  Second, most companies have an annual business planning process and annual incentive compensation plans and goals tie in nicely with this planning process.


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Back to Basics: Calculating Your Incentive Compensation Plan’s Payout Formula

Posted by Chad Albrecht on Tue, Sep 16, 2014

In the last 2 blog posts, we discussed metrics to include in the incentive compensation plan and the plan types that you should use. Now, we turn to the actual calculation of the payout amount.


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Back to Basics: Ideal Pay Level and Mix for Your Incentive Plan

Posted by Chad Albrecht on Wed, Aug 27, 2014

In the first “Back to Basics” blog, we covered incentive compensation plan eligibility and guiding principles. In this blog, we want to turn to targeted pay level and mix.  By “target” pay level, we mean the pay level that the “average” salesperson will earn for achieving expectations (often 100% of sales quota) in a given year.  When we say “target” mix, we mean the way that total pay is delivered – either in base salary or in incentive pay.  The mix is normally stated as a ratio, first with the percent base salary, and then the percent incentive.  For example, if a job with a target pay level of $100,000 has $70,000 of that delivered in base salary, we would say that the pay mix is 70:30.

Step one in establishing a targeted pay level and mix is finding good market sales compensation data.  For some industries, such as technology and pharmaceuticals, there are industry-specific studies that cover the vast majority of roles.  For other industries, you may need to turn to a broader, all-industry survey such as those conducted by the HR houses. 


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