- Home
- Publications & Resources
- Perspectives
The Growth Management System and Optimal Sales Compensation Design Process
Abstract
Sales compensation, or incentive pay, is a method or pay system that allows an organization to reward a salesperson for positive results. The method or system creates an output that typically is dollars paid to that person. Sales compensation enables management to align pay opportunity with the strategy and objectives of the business.
If done correctly, compensation will help an organization attract, retain and motivate top salespeople. If done incorrectly, it can result in turnover issues, drive inappropriate behavior and/or increase uncontrolled sales costs. This article explains why it is important to align sales compensation with the overall business and sales strategies, and the seven essential steps in the incentive design process.