The definition of incentive is, an additional payment (or other remuneration) to employees as a means of increasing output.
What is the additional output by the sales personnel? When the salespersons bring sales revenue on and above the assigned target, they are given incentive. Generally, this incentive is given based on an individual's performance. It is given in some percentage like 1% of the additional revenue. It is always routed through the routine salary. Generally, it is disbursed half-yearly or annually.
The % of sales incentive differs from one industry to another. Therefore, check with the HR managers from your industry about the practices in vogue.
Caveat: - Selling is easy but recovery is difficult. Therefore, few companies pay incentive also based on the ability of the salesperson to complete the process of recovery in a defined time span. Delayed account receivable disturbs the company's cash flow.
10th May 2019 From India, Bangalore