The idea of an incentive scheme is to motivate salespeople to break grounds and achieve even more objectives. The technicality of the program is terms and conditions that align with the objectives of the company.
What you will learn in this article
1️⃣ Bonuses offer flexibility when traditional incentive schemes fall short
In roles where performance is hard to quantify or where strategic, long-term goals matter more than short-term sales numbers, bonuses provide a more adaptable and fair reward mechanism.
2️⃣ Not all sales roles are suited to rigid commission structures
For teams like account managers, pre-sales, or those exploring new markets, it’s often more practical to use bonuses rather than set hard-to-define targets tied to variable pay.
3️⃣ Bonus schemes must account for partial performance
A well-designed bonus system should include flexible rules for partial achievement, allowing companies to fairly reward effort even when targets are only partially met.
Let’s have a quick look at the process
The basis of all incentive schemes is majorly on the aspect of technical decision making. Perhaps, it is even 100% about it. It follows a carefully outlined sequence to arrive at a format that suits the company’s objectives.
However, the decision-making process should be sequential in order to be effective. The first set of business is to define for the eligible role for the incentive. Team like but not limited to sales, pre sales team are entitled to the incentive team. The net order of business is to determine the payment levels in the plan, and this is where real brainstorming is needed. The fixed and variable part and the targets (as explained thoroughly HERE) required to unlock them should be decided as+ well as the disbursement process.
Talking about bonus payment as a credible alternative to variable parts of incentive. Because bonus is a sum of money added to a person’s wages as a reward for good performance, it can be used as a different technical payoff in an incentives scheme. It is distinct from commission because of the required performance.
Invest in yourself by buying my book HERE to learn how to design the most effective sales incentive program for your salesforce.
Some bonuses types that can be utilized
- Can be paid if a salesperson hits a landmark based on performance measures, achievements should be praised, and bonus is one perfect way to do that.
- Bonus could be granted to motivate salesperson; bonus can be used for encouragement to perform extra task.
- To encourage sales person to bring in more customers, it can be paid for every successful referral.
The level of amount to give
The amount that is paid got attaining a certain success level is a bonus. It can be a percentage of the salary either monthly or annually. For instance, a company can decide to give 10% of basic salary if the sales person brings the anticipated results in a month. We have established there’s a difference between bonus and incentive scheme. Now let’s highlight why bonus is applicable in some cases instead of the latter.
- Measures and goals are difficult to quantify and out them in numbers
- There is more attention to the quality of the work and not just the numbers.
- Company gain more in the long term rather than a short-term revenue.
- The role of the sales person is towards more strategic goals including account management.
- The company explores new territories where it is difficult to set fair targets.
- The company cannot easily assign in a fair way territory for the sales people. There is unequal sales opportunity for sales people
I think that you wouldn’t like to miss this insightful material that I give for free:
E-Book Synopsis -> How to scale up your sales organization: Click HERE
For a toolkit to assess your current sales incentives plan, click HERE
What if the sales person reaches half of his objectives?
A frequent situation that shows up is when a sales person meets half of the target. In this scenario, what is the bonus amount that should be paid by the company? Well, it is logical to think half of the bonus should be paid but it is not ideal. Like others, it Is a situation that needs careful deliberation. The bonus needs to be flexible enough to accommodate this kind of performance scenarios to pay either all or part of agreed amount.
The company retain the right to weigh the achievement levels of the person with regards to the expectations of the salesperson. Ideally, the payment will be paid accordingly taking in note the goals and achievements. If it’s half done, the salesperson could get 50% of the bonus accordingly.
Conclusion and thoughts
Bonuses can be a powerful and flexible tool to motivate your salesforce—especially in roles where performance is hard to measure, strategic outcomes matter more than short-term sales, or targets are difficult to define fairly. While commissions remain a popular choice in many organizations, bonuses offer an alternative that aligns better with quality, long-term growth, and team-based achievements. The key is to design a bonus structure that is fair, transparent, and adaptable to real-world performance scenarios. When used wisely, bonuses not only drive motivation but also foster a more balanced and sustainable sales culture.
FREE e-book digest — Choose the right sales compensation plan (let me know if you want the whole document. Click HERE
VIDEO to learn how to master the B2B consultative way and the power of being a subject matter expert. Click HERE
If you want to be part of a group of people that receive exclusive insights, register HERE
