Infographic; Performance Measures In Compensation Plans – How To Weight Them Effectively

It comes the time when designing a sales compensation plan one needs to decide which performance measures to use and the weight they will curry in the program.

Performance measures are those KPIs a sales person is judged and measured upon and consequently incentives are paid for. Deciding the measures to use needs some thinking with the first rule being that these measures shall reflect the goals of the sales team.

As long as there is more than one measures used in the program, one needs to think about the significance each of them will have in the system.

The below inforgraphic gives some insights to help sales management choosing wisely the weight between the measures.

Factors To Consider When Deciding The Pay Mix

When designing a sales compensation program one of the first to decide is the Total Target Cash Compensation for a sales role. That means how much a sales person will get compensated in a year for reaching her quota.

The target cash compensation is split into two parts; the fixed salary and the variable part. A critical question is how much one shall give to the fixed and how much to the variable part? The pay mix, as it is usually called, can be 50/50, 60/40 or any other split one decides to have.

Which are the factors to consider for a larger fixed or a larger variable part?

Use the below infograph to help you understand more this notion.

Infographic; Avoiding an Ineffective Sales Compensation Scheme

One of the worst nightmares for sales management is to design a sales compensation scheme that is ineffective!

Such a program doesn’t align sales people to the strategy of the company, doesn’t make sales people to put an extra effort and makes damage to the sales objectives.

Below’s infographic shows some principles how to avoid such as a system.