Hi Friends, I'm working in an Automation (Manufacturing) Company in the HR department, and we want to design Sales Incentive Plans for a newly joined Sales Manager. Kindly guide. Also, are incentives paid on a Monthly, Quarterly, Half-yearly, or yearly basis? Are they included in the CTC or separate from it?
From India, Pune
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1From India, Pune
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Definition of Incentive
The definition of incentive is, "an additional payment (or other remuneration) to employees as a means of increasing output."
Additional Output by Sales Personnel
When salespersons bring in sales revenue above the assigned target, they are given an incentive. Generally, this incentive is based on an individual's performance. It is given as a percentage, such as 1% of the additional revenue, and is always included in the routine salary. Typically, it is disbursed half-yearly or annually.
Industry Variations in Sales Incentives
The percentage of sales incentive varies from one industry to another. Therefore, it is advisable to check with the HR managers in your industry regarding the prevailing practices.
Caveat: Challenges in Recovery
Selling is easy, but recovery is difficult. Therefore, some companies also pay incentives based on the salesperson's ability to complete the recovery process within a defined time span. Delayed account receivables can disrupt the company's cash flow.
Thanks,
Dinesh Divekar
From India, Bangalore
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The definition of incentive is, "an additional payment (or other remuneration) to employees as a means of increasing output."
Additional Output by Sales Personnel
When salespersons bring in sales revenue above the assigned target, they are given an incentive. Generally, this incentive is based on an individual's performance. It is given as a percentage, such as 1% of the additional revenue, and is always included in the routine salary. Typically, it is disbursed half-yearly or annually.
Industry Variations in Sales Incentives
The percentage of sales incentive varies from one industry to another. Therefore, it is advisable to check with the HR managers in your industry regarding the prevailing practices.
Caveat: Challenges in Recovery
Selling is easy, but recovery is difficult. Therefore, some companies also pay incentives based on the salesperson's ability to complete the recovery process within a defined time span. Delayed account receivables can disrupt the company's cash flow.
Thanks,
Dinesh Divekar
From India, Bangalore
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