Your Guide to Variable Pay in Sales

This guide will help you understand what variable pay is and how it works.

Variable pay has been a popular incentive for sales people since the 1950s. It can be used as a reward for high-performing employees. It can also be used to motivate employees to reach certain goals or quotas.

Variable pay can be an effective way of rewarding top performers in sales teams, but there are risks involved with using this compensation strategy.

How to Determine the Right Variable Pay Structure?

Variable pay structures are common in organizations. They are often used to incentivize desired behaviors and to reward employees for their effort.

The science behind fixed & variable compensation is a complex topic, but it’s worth learning because it is the foundation of any compensation plan.

What are the Pros and Cons of Variable Pay Plans?

Variable pay plans are a type of compensation plan that motivates employees by tying their pay to the performance of the company.


-Variable pay plans can motivate employees to work harder and increase productivity.

-Employees are more likely to be invested in the success of their employer when they have a variable pay plan.

-Variable pay plans are more cost effective than fixed salary or hourly rates because they don't require a company to commit to paying an employee for an entire year or month before any work is done.


- Variable pay plans can lead to conflicts between employers and employees if the performance standards aren't clear from the beginning.

- Some people might not be motivated by variable pay, especially if it doesn't change much from month to month or year to year.

Considering Making the Switch to a Variable Pay Plan? Here are Some Tips!

If you feel your business can benefit from switching to a variable pay plan, but there’s a degree of hesitation because it might be suddenly too complex for you or your team to handle, then it is a wise idea to automate.

Once the backbone of your variable pay plan is set-up, a good sales compensation software should be able to simplify and automate the steps and processing for your business – whether it be for a simple or a complex variable pay plan.

One software worth considering for complex variable pay plans is QCommission. If your variable pay plan is simple and straightforward, but you want to save on time in processing everything, then it would be a good idea to look at Easy-Commission..

Automating your sales compensation plan has many financial and performance benefits for your business. Here are some of the benefits you can get out of it: Sales Compensation Automation and the Value it Provides to Your Organization.