Philosophy

CompensationMaster's approach to systematizing compensation is based on strategies that have been proven to offer significant benefits.

Key components to this approach are:

• Base compensation on sales force contributions
• Treat profit as an expense
• Allocate expenses fairly among sales professionals
• Base commissions on breakeven
• Offer a choice of compensation plans
• Recoup costs
• Align sales force and management
• Reduce waste

Offer a choice of compensation plans

A crucial component of CompensationMaster's approach is to offer sales representatives a choice of compensation plans.

• Experienced representatives who are confident in their own abilities appreciate the option of taking on more risk in order to maximize income. They may want to pay some of their own expenses in exchange for a higher commission rate.
• New recruits or those who have high fixed expenses, such as children in college, may prefer to trade some of their commission potential for a higher level of guaranteed income.

Offering a choice brings powerful benefits:

• Improved motivation - when representatives choose the compensation structure they find most appealing, it motivates them more effectively and more permanently than any temporary incentive plan.
• Easier recruiting - offering a choice of compensation plans is an attractive benefit that provides a competitive edge in recruiting.
• Expanded labor force - there are many people for whom your current style of compensation is not appropriate, yet who would make excellent members of your sales force. By offering different plans, you expand your potential pool of recruits.
• Eases introduction of new plans – providing a choice of compensation plans gives your sales staff more control during a time of change, increasing retention rates.

Although the logistics of offering a variety of plans might seem intimidating, it's actually much simpler than might be expected.

You can handle compensation the same way you do health insurance: once a year, employees choose their plan for the following year. Typically, there is an open season or representatives make their choice on the anniversary of the first day they started with the company.

When members of your sales staff are able to choose the type of compensation plan that best fits their needs, their tolerance for risk, and their lifestyle, they are motivated far more effectively than with any one-size-fits-all type of commission structure. The result is a more productive and stable sales force.

To learn more, schedule a demonstration over the Internet.

Next: Recoup costs