Chapter 2
Sales Compensation Fundamentals
In this chapter, we will review key sales compensation fundamentals. First, we will review variable compensation models and then examine why sales compensation is unique. Next, we will discuss the difference between income producers and sales representatives. Lastly, we will examine sales compensation design elements.
VARIABLE COMPENSATION MODELS
Figure 2-1 depicts five different types of common variable compensation models.
Figure 2-1 Common types of variable compensation plans.
The chart divides all incentive plans into two major categories: “target rate” and “target pay.” A “unit rate” plan has a ...
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