Six Tough Design Issues That Affect Compensation Plans

Below the big picture issues is another level of sales compensation plan questions that are both more granular and often a good deal more complex. Typically, these involve a combination of business strategy topics— customer segments, new sales channels, new sales jobs and new forms of organization, performance metrics, and financial goals—and compensation policy issues. For example, what constitutes "on-plan performance," and how much could the company pay to plan participants at that level, below it, and above it? The challenges are often a source of noisy debate between plan designers and top managers. Our list of tough design issues is representative and not all-inclusive. It reflects ...

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