Are You Giving Away Free Sales Incentive Pay?

Posted by Chad Albrecht on Mon, Dec 01, 2014

Companies invest in creating incentive structures that motivate their sales force. However, when incentives are not driving incremental sales, they can lead to wasted money and lower sales force engagement. This can be especially damaging for companies with slimming margins that are trying to spend every incentive dollar efficiently.


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Back to Basics: Adding Accelerators or Decelerators to Your Incentive Compensation Plan’s Payout Formula

Posted by Mike Martin on Mon, Sep 29, 2014

In the prior blog post, we described how to design your incentive compensation plan’s payout formula, and we briefly mentioned the concepts of accelerators and decelerators.  At a high level, accelerators are used to encourage increased performance and decelerators are used to safeguard against significant overpayments. 


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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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