Compensating sales people through commission is the most commonly used method to motivate sales people. Most companies use a traditional way of compensating, but Easy-Commission can dynamically calculate commissions online based on the performance of sales people. Sales Commissions are also referred in terms of Pay-for-performance, Sales Compensation, Incentive Compensation, Variable Pay, etc.
As sales people act as a backbone for a company, measuring their performances on regular interval is a mandatory action for any business. Sales people’s compensation is combination of their base salary and the sales commission or it can only be a commission made on every sales. Sales people with base salary are rarely seen. When a company set commission over sales made, both sale people and company are benefit as well. Sales people even take more risk to bring more sales in order to earn high commissions, which has a direct impact on growth of a company.
Sales commission program varies from industry to industry, from one company to another company of same industry and even between the sales people of a same company. Sales commissions are not governed by specific rules or laws which add lot of variations in different sales commission programs. Variations may take a form of how performance is being calculated (Revenue Vs Gross Profit, the frequency of calculation (Monthly Vs Quarterly), the type of transaction (Sales orders Vs Invoices Vs Payments), the level of sales people (Sales Rep Vs Sales Manager), whether Draw or Cap is being used, and so on.