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Control Systems
Sales Compensation and Incentives
Compensation is the most discussed aspect of sales. But most discussions are versions of compensation hydraulics that make Pavlovian assumptions: push this pay lever, and you'll get this kind of behavior. Answering the question “How should we pay the people responsible for dealing with customers?” implicates multiple aspects of your business model: goals, recruitment, training, the types of orders the firm gets, evaluations, and daily interactions between sales and others in and outside the firm. This chapter outlines a process for designing a sales compensation plan aligned with strategy. But it also discusses issues to address before you set specific numbers or debate different incentive plans: ...
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