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    Salesperson Compensation and Incentives

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    aamirjewani
    This document discusses various compensation models and methods for salespeople, including straight salary, straight commission, and combination approaches. It also covers non-financial rewards, sales contests, and making compensation programs effective. The key aspects addressed are deciding the appropriate mix of compensation elements, determining what percentage should be incentive-based, and balancing financial and non-financial benefits.

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    Attribution Non-Commercial (BY-NC)
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    Salesperson Compensation and Incentives

    Uploaded by

    aamirjewani
    192 views15 pages
    This document discusses various compensation models and methods for salespeople, including straight salary, straight commission, and combination approaches. It also covers non-financial rewards, sales contests, and making compensation programs effective. The key aspects addressed are deciding the appropriate mix of compensation elements, determining what percentage should be incentive-based, and balancing financial and non-financial benefits.

    Original Description:

    Chp11 Honeycutt Sales Management: Global Perspectives

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    This document discusses various compensation models and methods for salespeople, including straight salary, straight commission, and combination approaches. It also covers non-financial rewards, sales contests, and making compensation programs effective. The key aspects addressed are deciding the appropriate mix of compensation elements, determining what percentage should be incentive-based, and balancing financial and non-financial benefits.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    192 views15 pages

    Salesperson Compensation and Incentives

    Uploaded by

    aamirjewani
    This document discusses various compensation models and methods for salespeople, including straight salary, straight commission, and combination approaches. It also covers non-financial rewards, sales contests, and making compensation programs effective. The key aspects addressed are deciding the appropriate mix of compensation elements, determining what percentage should be incentive-based, and balancing financial and non-financial benefits.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 15

    Overview Various compensation modes and methods

    Straight Salary Straight Commission Combination

    Sales Contest Non-Financial Rewards Expense Accounts Making Compensation and Incentive Programs Work Deciding the Most Appropriate Mix

    3 basic questions
    Which method is most appropriate for what

    kind of activity? What % of total should be incentive based? What is the suitable mix of financial and nonfinancial benefits?

    Major components
    Salary Incentives Commission Bonus Benefits

    Straight Salary Straight Commission Combination Approach Selection depends on:

    Business Objectives (New Accounts or

    Relationship Building) Close Supervision

    Proportion of Incentive Pay to Total Compensation Incentive Ceilings When a sale is a sale? Team versus Individual Incentives Frequency of Rewards

    Contest Objectives
    Complement compensation program Aimed to achieve extra sales

    Contest Themes
    Creative

    Probability of Winning
    3 approaches: Compete with themselves Compete with others Compete for group or individuals

    Type of Contest Rewards


    Monetary
    Merchandise Travel

    Depends on person Point based system

    Contest Promotion and Follow Through


    Launch in quarterly meetings Keep follow up to motivate people

    Criticism of Sales Contest


    Short term motivation Borrowing sales May affect morale negatively

    Promotion Chances
    Lack of promotion leads to de-motivation

    and low attraction of non-financial rewards Two career tracks


    One is sales based Other is sales management based

    Recognition Programs
    Wall of Fame Newsletters etc.

    Key Features
    Performance based no subjectivity Balanced A ceremony should be involved The program must be in good taste Adequate publicity

    Assessing the Relationship Selling Objectives


    Determine breakup of efforts expended by

    sales person on various activities Determine what breakup is in the best interest of organization Motivate towards the gaps

    Determine which Aspect of Job to Reward


    Should be realistic, measurable, specific,

    time bound, achievable Not too many metrics Trend towards customer centric metrics and limitations Combination approach

    Suitable Mix
    Varies significantly Determine the gross amount of

    compensation that is needed to attract and retain salesperson Depends on importance of aspect of selling Also depends on company size

    Dangers of Paying too Little


    High turnover (for good performers) Low Performance (for already low

    performers) Low motivation

    Dangers of Paying too Much


    Increases selling cost
    Non-sales employees may have low morales Law of diminishing marginal utility applies

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