5 Principles That Will Make Your Sales Commission Compensation Plan Irresistible

Sales are the lifeline of any business. If you want to grow your firm in leaps and bounds, then you need a very solid sales strategy. You will also need an exceptionally good team to sell your products and spur the needed growth. One of the secrets of achieving this is to create a sales compensation plan that will literary attract the best salesmen and women in the market. Once you have your plan, how can you sell it to your employees effectively and avoid unwanted reactions? You can make your compensation plan irresistible by basing it on the following 5 principles:

  1. Clear and Growth Oriented Objectives

Before you can hire anybody to sell your products, you must have a clear objective of what you want to achieve, both financially and strategically.  It is important to communicate these objectives to your employees. If you are making changes to an existing strategy, point out clearly where the differences lie.

Depending on the nature of your business, your objectives must be easy to understand and compelling enough to make someone else desire to be part of your journey. Your sales force must see how their involvement will help shape the success of your company. This gives them a sense of ownership which can fuel their desire to accomplish the set goals. Most importantly, help them understand how the new compensation plan will support them in their effort to accomplish the company objectives.

  1. A Winning Strategy

As you sell your compensation plan, present your sales force with a selling strategy that is competitive and viable. For instance, consider running highly competitive sales campaigns to win new business and give your employees an edge over their competitors. Outline clearly your areas of focus so that your employees will spend more time on products that matter to your growth.

A winning strategy will make it easier for your sales team to attain their targets. This keeps them motivated and optimistic. In any case, the performance of a salesperson is highly proportional to their level of motivation.

  1. Attractive and Sustainable Remuneration

When you introduce a sales compensation plan, the first thing that rings in the minds of your employees is how much money they will take home. They want to know the details of your plan in terms of base pay, commissions, and bonuses. However, they are also looking for a long term and dependable source of income. Therefore, your plan needs to be pegged on performance for it to be sustainable.

You do not want a situation where you pay out all the money to employees and not make profits. On the other hand, you do not want to be mean and cap what sales employees earn. This ought to be a win-win situation for both employees and the company. Besides, competitive pay standards will attract and retain the best employees in the market.

  1. Simple and Transparent Reward Computation Methods

The formulae used to determine how much commission is payable to an employee should be easy to understand and compute. Do not seek to complicate things. The employees ought to be in a position to calculate their commissions. This level of openness acts as a self-motivator that makes your employees work harder and achieve more because they know their reward is commensurate with their performance.

The moment you make this process complicated and hard to understand, you create an element of suspicion. The staff will always feel as if they are being cheated. This is a possible root of discontentment, loss of morale, and consequent fall in sales.

  1. Recognition of Exceptional Performance

Good salespeople thrive in competitive environments. How does your compensation plan exploit their common attribute? If your new plan can show them clearly how their income will increase limitlessly depending on their performance, then they are home. You can outline some bonuses for top performers in addition to their base pay and commissions. Of importance is to make sure if they meet or surpass the 100% mark, you reward them justly. 

On the other hand, you need not keep non-performers who barely meet their targets. If you have so many of them, then your business will suffer. The way you manage this needs to be detailed in your compensation plan too. It should never come as a surprise that an employee is issued with a separation notice due to non-performance. You need to detail what ought to happen in case an employee fails to meet their target. Maintain a balance and never be too lenient or too strict.


A good sales commission compensation plan seeks to help employees embrace a company’s developmental agenda. It also recognizes the need to reward sales staff handsomely while protecting the interest of the firm. To achieve this, the plan sets standards on how to reward best performers and manage non-performers in a fair and transparent manner. With the right motivation, your employees can become the best sales force ever that is able to deliver exceptional performance.