FINANCIALS: Compensation Models
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      3. FINANCIALS: Compensation Models

      Creating Effective Compensation Plans

      You will learn the steps to take and the best practices for creating or rebuilding a sales compensation plan.

      A sales compensation plan is a set of guidelines and rules that dictate how sales representatives will be paid for their performance. It outlines the base salary, commission, bonuses and other forms of compensation that a salesperson can expect to receive.

      A well-designed sales compensation plan and commission structure is crucial for achieving business success.

      It should ensure:

      • fair compensation for sales employees
      • motivate specific behaviors and actions that align with the company's and customers' needs
      • drive the team to hit goals that increase revenue while maintaining profitability

      Overall, a good plan balances the needs of the company with the needs of the sales team, aligning sales incentives with overall business objectives.