Chapter 5
Formula Types
At the core of every sales compensation plan is a formula that translates sales performance into income for the salesperson. This chapter presents a comprehensive listing of the different types of sales compensation formulas. Each formula is effective given the proper job context. In other words, these formulas are neither good nor bad, but they can be effective or ineffective depending on their job application.
TYPES OF PLANS
In Chapter 2, we introduced five different types of incentive plans. In this chapter, we will present formulas for unit rate plans and for target pay plans, including 3×, 2×, and add-on plans. Companies seldom use gainsharing plans for sales personnel unless they are part of an all-employee companywide ...
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