Sales Commission Articles

Salespeople are a company's ambassadors to the world. They actively promote the company and its products and services. They are the front line between the company and its customers, and are typically the driving force of revenues - top-line company growth.
10 Incentive Mistakes to Avoid at All Costs
Incentive programs can motivate your staff to new heights, but make certain you sidestep counterproductive mistakes.
The power of incentive programs: the right incentive program can motivate ordinary people to do extraordinary things.
SALES COMMISSIONS: A tool for success
While commission-based compensation isn’t the only—or even necessarily the best—way to compensate a sale force, it is predominate in most industries that rely on a direct personal sales force to market their products or services.
Expectancy Theory (also known as the Valence-Instrumentality- Expectancy Theory) (1964)
Vroom's theory assumes that behavior results from conscious choices among alternatives whose purpose it is to maximize pleasure and minimize pain. The key elements to this theory are referred to as Expectancy (E), Instrumentality (I), and Valence (V). Critical to the understanding of the theory is the understanding that each of these factors represents a belief.
How often should sales commission plans be changed?
At a recent business meeting I was seated next to the president of a local business sharing information about our respective companies. My tablemate explained that his firm had no need for the services of a sales incentive plan consultant, as he had not changed his sales compensation plan for ten years.
Compensating Your Sales Force
Compensating your sales force presents a particular challenge because packages must be extremely competitive and provide adequate incentives to motivate employees to do their best.
CPM: Involving the sales team in performance management
How do companies align sales execution with their overall strategy and objectives? Although much can be achieved by investment in marketing and in sectors such as the food industry by the relationships with, and incentives given, to the retailers, there is also a dependence on the sales teams. It is their incentives and commission plans that drive behaviour and ultimately the success or failure of achieving the expected types and levels of revenues and profit margins.
Reconnect Sales Management to Profitability
You are what you sell - sales is the front-wheel drive that pulls a company forward in the marketplace.
But in many companies, top managers are frustrated because the sales process seems disconnected from corporate objectives. This presents a serious impediment to management's efforts to manage profitability effectively.
A Sales Commission Plan That'll Supercharge Your Profits
What I’m going to share with you today is the single most powerful trick I know for supercharging your bottom line.

At some point in time, if you are going to grow your construction business beyond $2 million, you are going to need someone working on sales full time. Now, maybe sales is your thing and you want to do that full time. Fantastic.
Sales Commission - What Return Should You Expect On Your Sales Compensation Investment?
This article answers the following questions :
How do most companies look at return on investment (ROI) for their sales compensation expense?
What portion of sales compensation expense do companies allocate to managing existing accounts versus pursuing new accounts?
Real Estate Sales Commissions
If you're going to hire a real estate broker to sell your real property, you need to understand how the broker gets paid. Generally, the broker receives a commission from the seller when the sale is completed. The amount of the commission is set by the listing broker and may be negotiable by the seller and the listing broker. The terms for payment of the sales commission need to be included in the real estate brokerage contract or listing agreement.
Sales Commissions: Find the Plan that Works for You from Monster ...
For every salesperson, there's a perfect product and a perfect commission structure. Finding both leads to sales success. Common structures for sales commissions include being paid a high salary with low commission or being paid based on individual sales, territory volume, a share of the profits, bringing in new business, maintaining old business, wholesale or net (retail) sales, hitting an exact target or hitting variable targets.
CRM Daily | Managerial Mistake: Cutting Sales Commissions
Some companies may actually succeed in maintaining an existing customer for a year or so after declaring it a "house account," but eventually the competitor makes an inroad. After all, how did you get that customer in the first place? Certainly not by telephoning the purchasing department once a month and making two trips a year to buy them lunch.
How The Right Sales Compensation Plan Can Supercharge Profits
What I'm going to share with you today is the single most powerful trick I know for supercharging your bottom line.
At some point in time, if you are going to grow your construction business beyond $2 million, you are going to need someone working on sales full time. Now, maybe sales is your thing and you want to do that full time. Fantastic.
Build an Effective Sales Compensation Governance Program for Your Organization

Compensation governance typically is associated with executive compensation. Does governance have a place in sales compensation?

Best of Both Worlds: Using Hybrid Incentive Plans
Today's changing compensation landscape provides opportunities to improve pay designs, specifically in sales management compensation. The good news for sales executives and managers is that, unlike CEOs, their pay designs inherently have the potential for more flexibility, creating a "win-win" for both plan participants and shareholders. Here's why: Sales management has a more direct line of sight to sales and profits than top management. This allows for commission pay designs with more volatility than discretionary, nonsales management cash bonuses.
Perception is Reality with Salesforce Incentive Compensation
"Big territories can't grow." "There aren't enough sales opportunities left." "Marketing doesn't understand customer-level realities." Left unaddressed, uninformed perceptions can drive dissatisfaction with the sales incentive plan and, in extreme cases, the job. Sales and HR leaders must communicate the realities and provide clarity around the decision-making process to quell those distorted perceptions.
Finance is from Mars, Human Resources is from Venus
Does your CFO understand your objectives with sales compensation plans? Do you understand the finance department's mandates for your plan design? This article, from workspan magazine, is a refreshing look at the sometimes challenging relationship between finance and HR, and we know sales comp professionals can relate.
2009 Sales Compensation Checklist
More than 65% of all companies began their fiscal years on January 1. Read this checklist of action items to ensure the success of your 2009 program.
Managing Sales Compensation in an Uncertain Market
Learn how to monitor and adjust your pay plans to accommodate shaky market conditions.
Sales Compensation Payouts Stall in 2008, 2009 Not to be Much Better
According to the 2009 Sales Compensation Trends Survey, growth in sales compensation payouts in 2008 were 2.5% above 2007, but a 37.5% drop from the previous year. According to the seventh annual trends survey, only 54.55% of respondents plan to give a base salary increase to eligible sales personnel in 2009. For those who plan to grant a base salary increase, the median increase will be 3.0%.
Sales Commission Calculation - Just the Basics, Ma'am
Like many of you, my fourth quarter included a lot of sales compensation design, review and revision. Given the business environment and the forecasting difficulties that many organizations are facing, some are still working - even now - to get sales incentive plans nailed down in final form. With this in mind, I thought it might be helpful to dedicate a post to the basics of sales commission calculation.
Disputes over Unpaid Sales Commissions and Bonus Payments: When Does a Mere Expectation Become into an "Earned" Wage?
Most employees are paid for their time. Thus, if they work eight hours at a rate of $25 per hour, or eight weeks at a salary of $2,500 per week, there is little dispute over the amount of wages owed. But disputes begin to multiply where the payment is deferred and is calculated based on meeting certain performance targets. Typical disputes include the following:
Rep. Stark Urges CMS To Block New Medicare Advantage Sales Commissions Rules, Saying They Will Promote 'Churning'
House Ways and Means Subcommittee on Health Chair Pete Stark (D-Calif.) on Thursday in a letter to CMS acting administrator Kerry Weems called for a limit on new sales commissions in an attempt to dissuade sales agents from pressuring Medicare beneficiaries to frequently switch Medicare Advantage plans, CQ HealthBeat reports.
Calculating Commission Payments before You Quit Your Job
Most sales / business development staff are paid a basic wage plus some form of commission or bonus (indeed, some people are paid on a commission basis only). The more products / services they sell, the more money they will make over and above their basic salary.
Commission Sales Vs Salary Sales
In the sales industry, one of the most heated topics of discussion is commission sales vs. salary sales. There are benefits to using both, but many people are hard-core advocates of one or the other. Some people believe commission is the only method of payment for true salespeople, while others would like to see a balance between the two.
Sales Performance Management
What It Is and Why You Can't Afford to Ignore It
As most companies know, sales are the force behind the growth of a company. If the company has a product or service, then sales is the key to revenue and the sales force is the key to making that revenue. Over the last several months, the economic landscape has changed significantly, and companies are looking for ways to increase sales effectiveness and maximize profits.
Sales Compensation Plan Components
We find that many companies have ill-defined, confusing and generally inappropriate sales compensation structures. It is important to create a sales compensation structure that motivates sales reps to higher levels of performance.
Start-Ups Need to Offer Exceedingly Generous Sales Commission Plans
A start-up software entrepreneur asked me, "What rate of commission should I pay to salespeople for the business they bring in?"
The Four Cornerstones of Effective Sales Compensation Plans
Effective sales compensation is critical to the success of any go-to-market strategy. Yet designing and managing a program is rarely easy. Determining how people are paid is a sensitive matter that can become increasingly complicated when reconciling the disparate needs of key stakeholders in sales, finance, human resources, and marketing. To better manage this complexity and to keep the discussions constructive, consider the following four cornerstones of effective sales compensation.
When is it time to buy sales performance management software?
When sales and finance executives at Comcast-Spectacor realized they were missing potential sales because managers were unable to spot key cross-market opportunities, they knew it was time to move to a sales performance management software application, said Mark DiMaurizio, the company's vice president of technology solutions.
Creating an Effective Compensation Plan for Sales Representatives
An effective sales compensation plan for sales representatives is critical to the success of any go-to-market strategy. Yet the design and management of a compensation plan for sales teams is rarely easy. After all, determining how people are paid is a sensitive matter which can become increasingly complicated when reconciling the disparate needs of key stakeholders in sales, finance, HR, and marketing.
Sales Compensation and the Law
The New York Department of Labor recently passed an amendment to the Labor Law relative to sales personnel. Effective October 16, 2007, employers are required to provide written terms of employment for commissioned salespeople or risk adverse impact of decisions rendered in any wage action brought against the employer.
Aligning Sales Goals and Incentives
On paper, the theory behind sales incentive alignment seems pretty straightforward. Identify a key business goal, such as new product sales, profitability, account penetration, or reducing inventory, and then develop the right programs to drive results.
Electronic Spreadsheets: The Good, the Bad & the Ugly
On the 25th anniversary of the development of electronic spreadsheets, the good news is that spreadsheets have had a positive impact on the way businesses operate behind the scenes—from finance and accounting to operations and marketing and human resources—and they save time.
AutoNation unlawfully deducts commissions from the Sales Associates' wages in violation of the wage and hour laws
Sales Associates File Class Action Against AutoNation Alleging Unpaid Sales Commissions with the Help of the California Attorneys at Blumenthal, Nordrehaug & Bhowmik
Sales Commission In Affiliate Marketing
This will provide useful information if youre planning to start affiliate marketing. You earn profit comes from sales commission. Most affiliates are interested in products with high sales commissions. Merchants are interested in selling their products and pay as little commission as possible. This will allow them to get the maximum benefit.
From Chaos to Order with QCommission
It's early in the year, and all businesses, big and small, want to start off on the right foot when it comes to financial reporting and maintaining accurate corporate information. That's why we want to tell you about this great sales commission calculation software we are using at JPC Inc. available from called QCommission.
Danger! One Sales Measurement Is Never Enough
Have you ever asked your single friends what they are looking for in a mate? They usually come back with "the list", nice eyes, good sense of humor, decent job etc. Very rarely will you hear just one thing. And, at times, the list may be too long and unrealistic.
The Do's and Don'ts of Quota and Comp Plan Adjustments
Every couple of months, we get a call from a member who's in the sticky situation of needing to make mid-quarter adjustments to quotas or compensation plans. There's a variety of reasons why companies land in these situations. Sometimes a new product launch isn't as well received by customers as hoped.
How do I file taxes on the sales commission I made last year?
I am an outside sales agent for a travel agency. I am paid commission with no taxes taken out. I have a few questions.
1) Is there a certain amount of money that I would have had to make in order to have to file taxes on that?
United States Sales Commission Laws and Regulations
A sales commission is a sum of money paid to an employee upon completion of a task, usually selling a certain amount of goods or services. Employers sometimes use sales commissions as incentives to increase worker productivity. A commission may be paid in addition to a salary or instead of a salary. The Fair Labor Standards Act (FLSA) does not require the payment of commissions.
When Is a Sales Commission Legally Earned?
It is not uncommon for sales representatives who experience transition in their careers, either voluntarily or otherwise, to close sales while in the company's employ but not get compensated for their successes. Whether compensation is purposely or unintentionally withheld by the company, the effect is the same. A legal dispute will arise as to the sales person's right to earn the commission. For example, what if a sales representative closes a sale, but the customer doesn't send in payment until after the sales person has left the company? In other words, when does a sales representative, in the legal sense, earn the commission?
How Base Plus Commission Works
Base plus commission is one of several common pay structures used by companies. Common in sales and retail environments where employees are offered commission as an incentive to sell more, this pay structure is also used in other scenarios to provide increased compensation when the worker produces more results.
Why You Should Promote Residual Affiliate Programs
Are you a webmaster in will need of additional income? Or are you planning to set up an on the internet enterprise but you still do not have any product to sell? If so, affiliate advertising might be the greatest answer for your problems.
Standard Sales Commission Rates
Sales people exist in a variety of industries, such as retail sales, furniture sales, real estate sales and insurance sales. Due to the varying industries and products, a standard commission rate does not exist for all salespeople. Within each industry, some standards in commission pay do exist.
Is an employer required to pay overtime on commission for inside sales? New York
If an employer extends overtime for base hourly wage and commission for a month for an inside sales job, are they required to pay that overtime on the commissions made during that month? If so, how would the time and a half calculation be applied to the commission? What are the repercussions for not paying the overtime on commissions if it hasn't been paid by a certain amount of time?
If a sales person is retiring do we “buy out” their future commission stream?
This one is tricky, and we’ll provide an answer based on comp design principles and what we’ve seen in practice. But please know that there are laws governing commission payments in some countries, and in some states in the US.
At What Point Are Commission Sales Earned?
As 2011 gets underway and economic conditions improve, many companies will be hiring new employees and sales representatives. In so doing, these companies will be executing employment contracts and relying on compensation management as many of these contracts will involve sales commissions and Sales Commission Software.