Four Key Decisions for Effective Incentive Compensation Plan Design

Designing an effective incentive compensation plan requires the company to make four key decisions, shown in Figure 10-9. Each of these decisions is discussed in detail in this section.

Level: How Much Should a Salesperson Be Paid?

The annual income level for full-time salespeople varies significantly. It can be as low as $25,000, and in some cases it can exceed $1,000,000. Income differences exist between industries, within the same industry, and even within the same company.

Interindustry income differences are usually due to the need for different types of salespeople. Customers differ across industries. They have various needs and buying processes. Meeting these needs requires ...

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