Commission Comp Plan

Commission pay plans are usually based on two factors, employee performance, and a percentage of what they have sold. It is possible to over-reward and pay out a percentage that is too high so what are the best sales commission pay plans?

When developing a commission-based pay plan, think of these factors:

• It should be simple - If your commission plan has so many tiers to achieve and wording your sales team doesn't understand, it's useless to the employee.

• Goals - Are the goals you set unreachable? If they are, re-look at these goals.

• Focus with teams - Decide if team focus is better than individual. This doesn't work for all commission-based pay plans, but works well in a tight sales competitive businesses like car sales.

• It should be flexible - Never try and keep the same plan year after year, or even month after month. If sales people or teams are achieving goals time after time, they are making your business money so you can change the commission pay plan to reflect that.