Monday, 15 August 2022
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Sales Commission Plan - Final Checklist

One of the most common pitfalls that Sales Managers fall into when they design commission plans is that they set targets on factors that cannot be easily measured. Another mistake is that they construct commission plans that are overly complex to understand and manage.

Here is a quick checklist to ensure your commission plan is on the right track:

  • Can I measure every variable that needs to be measured for the commission plan to work?


          Measuring the final profit on a service can be difficult or not possible until the end of the project. 

  • Do I have any parameters that are worth less than 15% of the total commission payment?

          A value of 15% or less will not be ample for the salesperson to focus their time. 

  • How varied are the commission plans for different sales roles in the company? The plans shouldn't differ greatly from sales role to sales role.


  • If reaching a profit target for the company is the goal, then that should be reflected for all sales roles participating in the commission plan.
  • Does my commission plan overlap any other variable pay plans? Bonus, Profit Share, Incentive ...
  • Is my commission plan overly complicated?

          If you agree with any of the following observations then it probably is:

    1. It takes an unreasonable amount of time to administer each month
    2. There are more sub clauses in it than main clauses
    3. Our sales staff cannot quickly calculate the results
    4. There are no more than 3 levers or variations
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