Sales compensation philosophy

A sales compensation philosophy is a set of principles that guide how a company compensates its sales team. Sales compensation philosophies typically focus on three key areas:

  • Attracting and retaining top talent: Sales compensation philosophies should be designed to attract and retain top talent. This means offering competitive salaries and commissions, as well as other benefits such as bonuses, stock options, and travel allowances.
  • Motivating sales performance: Sales compensation philosophies should also be designed to motivate sales performance. This means tying compensation to specific goals, such as sales volume, new customer acquisition, or customer retention.
  • Aligning sales interests with company interests: Sales compensation philosophies should also be designed to align sales interests with company interests. This means ensuring that sales representatives are rewarded for selling products or services that are profitable for the company and aligned to the key business objectives. 

Recommended reading:

How to choose your sales commission structure 

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Our sales compensation philosophy is built around the idea that every comp plan should be simple, logical, and fair. 

Simple. The plan has to be easy to understand, otherwise, you won’t get the behavior you’re trying to encourage. 

Logical. Comp plans should follow your company’s strategy, not the other way around. 

Fair. It has to be attainable and people have to feel like they can make money off it.

When your plans meet all those requirements, you’re setting you and your team up for success. Should you need additional design support or sales compensation templates, visit Compensation Hub, and don’t forget to check out QuotaPath’s blog.

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