It is essential to use competitive compensation and commission plans. Employees who feel valued will be more persistent and loyal to the company. Commission plays a major role in showing salespeople that their hard work is appreciated and rewarded.

 

A study by Tinypulse indicates that 43% of employees would be willing to leave their current job for just a 10% raise at another company. Furthermore, a study by BCG shows that, in general, the happiest employees at work are those who feel appreciated.

To recruit talented salespeople and ensure their retention, it is necessary to implement a compensation plan that fairly rewards their efforts, which undeniably motivates sales teams.

 

The elements that make up your salespeople’s compensation plan

It is important to have a clear and precise idea of ​​what the business jargon terms refer to:

The Sales Quota
A sales quota is a numerical goal over a given period of time for a salesperson, a team or even a geographic branch. These goals can be measured in several ways , such as volume sold or revenue generated. A salesperson’s quota is generally indexed to their compensation plan.

Salary
Salary is a fixed and regular payment, the amount of which is presented as a large annual sum but distributed in small amounts throughout the year.

The Commission
A variable form of compensation that whatsapp number russia a salesperson receives based on the amount of sales made. The management of sales commissions depends on the type of activity, the sector, and is similar to a percentage of the income generated by a sale. The commission is generally given in addition to a salary.

The Bonus
Another variable form of remuneration awarded for good performance, the bonus is an incentive often mentioned in interviews to attract promising profiles.

The Potential Global Income
This is an estimate of the total compensation that can be expected for a specific position by combining fixed (salary) and variable (commission and bonus) compensation .

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Examples of effective compensation models

Depending on your type of company and your challenges, there are 9 classic compensation models that you can consider.

1 – Salary only
This form of fixed compensation is rare for sales teams, because commissions and bonuses are good incentives.  To surpass oneself to achieve performance beyond minimum quotas. It has the advantage of considerably simplifying the calculation of Sad Life Box salary expenses for the employer.

commercial salary benchmark

2 – Commission only
This purely variable remuneration sets high stakes on performance, with the risk that a salesperson will not receive any income during a period of activity without sales. Furthermore, the prospect of remuneration without a ceiling can frighten the employer, but this never constitutes more than a percentage of the total turnover achieved for the company.

For this model, it is important to keep in mind the salesperson’s involvement in making the sale.

3 – Fixed salary + commission
This is the most classic configuration for a salesperson, and perhaps the most comfortable. It ensures a stable minimum income, while leaving an interesting incentive to go for big performances to receive a commission.

In addition, this model facilitates long-term payroll forecasts for the employer thanks to its relative predictability.

 

5 – Absolute Commission
This offers the advantage of being able to modulate the levels according to the objectives to focus on a certain product, territory or market. However, it can be complex to find the fairest formula for everyone, and objectives that are too specific can distance salespeople from the general mission of the team.

To go further, download this free template and formalize your company’s business strategy with a simple, structured plan.

 

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