*Employees closing sales and sales management typically have the most aggressive pay mixes, with a higher percentage of their compensation at risk than other sales positions. Straight-commission plans are more appropriate for sellers that work as independent agents and have ownership of their accounts.īase salary to incentive pay mix can vary considerably by type of sales position (Table 2). Some straight-commission plans are ineffective and inappropriate for companies that need sales reps to sell products and services created and owned by the company. It is rare for technology and life sciences organizations to have a commission-only sales compensation program with no base salary or bonus. * In addition to a guaranteed base salary, guaranteed cash allowances for automobile and/or housing allowances are common for some sales positions, particularly in Europe and Asia. Cash Compensation Combinations by Type of Sales Employee
Examples include indirect sales, sales support, reps selling low-priced products, and reps selling through distributors.
The following article highlights variations in sales pay mix and issues to consider when deciding how much compensation to tie to cash incentives. When designing a sales compensation plan it is important to consider differences between types of sales positions and the impact they have on influencing and closing sales.