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Choosing a sales compensation plan is an important decision. However, there is no one size fits...

  1. Choosing a sales compensation plan is an important decision. However, there is no one size fits all approach. What are some of the factors involved in the compensation process? Are there any best ways to compensate sales personnel? After reviewing this week’s resources and your research, in your own words identify at least three factors involved in the compensation process. And YOU must Share with your classmates your plan and why you feel it will be effective and adequately motivate your sales team towards organizational goals.

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Expert Solution

Some of the factors involved in the compensation process
1. Compensation needs to be commensurate with the demands of the job and the skill and experience and qualification required for the job.
2.General price levels and particularly cost of living of the place where the business operates , plays an important role in fixing compensation packages.
3. The presence of labor unions and their bargaining capacity heavily influence the compensation process.
4. Government legislations applicable to the business.
5. Employer's financial capability.
6. Profitability & productive efficiency of the company
7. The specialised nature of the job or work-place hazards involved also dictate the compensation to be paid.
Best way to compensate sales personnel is
to pay a combination of fixed salary plus variable commission based on the sales $ made.
This will ensure certain amount of stability in their earnings , so that they are free to concentrate ,to prove more, without the hassles of how to handle their homely commitments.
The sales personnel will be assured of some basic earnings.

jeff jeffy answered 5 months ago
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