Sample Of A Compensation Plan
Many companies and organization are looking to revamp their compensation plans and this keeps them on a look out for a sample of a compensation plan so that they can take important components and integrate them into their existing compensation plan.
The idea behind a sample of a compensation plan is to make existing plan better and more attractive so that organization can retain talent and motivate employees to excel.
Sample of a Compensation Plan:
To illustrate a sample of a compensation plan, we are going to look at the components of a sales compensation plan. One thing is for sure that a sales compensation plan has to be properly developed so that the sales personnel can be properly motivated and compensated. Many companies have ill-defined sales compensation structures and then wonder why their sales team is not achieving its target.
In order to have good sales compensation plan, you must ensure that the sales team is compensated based on the direct result of its efforts. This means they should receive rewards for meeting their monthly obligations and then have further incentives to surpass their monthly targets. The targets should not be too high or too low and this is where the problem comes in.
When checking a sample of a compensation plan for a sales team, you will always see the plan with four basic structures; namely salary, commission, bonus and sales incentives. A good compensation plan for a sales team should have all the four components.
The salary has to be low enough so that you have enough room to create sufficient incentive and motivation, but it should also be high enough so that the sales representatives can meet their financial obligations. Remember, salary should be between 15 to 40 percent of the total compensation and the balance should be divided between commissions, bonuses and sales incentives.
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