Everyone knows that sales is a huge factor in the success of any business - That’s why it is critical that the business owner and his/her team understand the importance of bringing in the sales and making the necessary plans and action early in the business. Nothing happens without a sale. No matter what you do, no matter how good your product is, you cannot get anywhere without a sale. This is so true. Most of us still don’t really understand or appreciate the art and science of sales and the difference between an effective and excellent sales professional. But in order for your company to survive and succeed, you must invest in hiring, training, and managing your sales department.
Technology is growing smarter and automation in the sales process is becoming a reality. In fact, we now have some sales functions that require no real-life human interactions at all. For instance, the process of buying keywords for Google’s Adwords is completely automated. As the role of sales reps evolves due to automation and artificial intelligence, it also mandates companies to alter their compensation structure to accommodate these changes.
Incentive compensation is a type of pay structure that is based on how the business or employees perform. With this kind of a pay structure, employees may receive a base salary and extra reward for meeting a specified target. There are multiple performance measures that are used to determine who qualifies for an incentive.
Businesses use an incentive compensation plan to highlight the type and amount of reward each employee is supposed to receive for meeting the set target. When thinking about the incentive pay plan to adopt for their employees, companies have various options. These may include performance bonuses, stock options, profit sharing and merit-based raises, among others. Companies can also give employees non-monetary incentives like paid vacations and some days off.
Salaries are among the main expenses of a company. To make sure a business tracks how much they are paying their employees, it needs to come up with a compensation plan. It is through this document that businesses will assess whether they are paying their employees adequately. How do you write a compensation plan?
Every company strives to keep their salespeople motivated. This is because these employees are the key drivers of any business, whether selling services or tangible products. One way of ensuring the sales force is fully motivated is by compensating them properly for their work. The reward salespeople receive from their employers for their work is called sales compensation. The total sales compensation is calculated by summing the base pay, commission, and any incentives associated with meeting specified targets.