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Incentive compensation is the variable income sales reps earn based on their performance in addition to their base salary, and there are a lot of ways to go about it. Discover everything you need to know to get it right. Incentive compensation is the variable income sales reps earn in addition to their base salary.
An annual incentive plan is a plan for compensation that is earned and paid based upon the achievement of performance goals over a one-year period. These plans motivate performance and align executives' work with the company's short-term performance goals.
Start at the Top ?Talk about what kind of behavior you want to reward," Coates said. ?Make sure you're rewarding behaviors that will help your business financially and that will be positive for your clients as well." Leaders also need to discuss which employees will be eligible for incentive compensation.
term incentive plan or LTIP is a type of executive compensation that typically comes in the form of performance shares or matching shares of the company.
Employers often structure these incentive plans as a percentage, like 5% of all the deals each sales rep closes. So if a sales representative's employer offers this incentive-based compensation and the worker is responsible for $100,000 in sales over the year, her incentive payment would be $5,000.