I would like to know how is Sales Incentives calculated for a Sales Employee?
From India, Calcutta
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16From India, Calcutta
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It depends on the amount of business the salesperson gets. Based on that, he is given a certain percentage, let's say 5%. In some cases, they have slabs like Rs. 10,000-200,000; he gets around Rs. 3,000, something of this sort.
All of these are just assumptions by me as I am not a salesperson.
Regards,
scare_crow
From India, Mumbai
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All of these are just assumptions by me as I am not a salesperson.
Regards,
scare_crow
From India, Mumbai
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Radha, scarecrow is correct in presenting a form of sales compensation.
Another form of Sales compensation is referred to as "Base plus Commissions."
A sales executive would be paid a base compensation rate—normally representing a projected 20% to 40% of his or her potential income base for the year—with all benefits reductions taken from this base compensation; he or she is awarded commission as a percentage of total revenue volume sales achieved on behalf of his/her employer.
Let's say the Sales Exec expectation is $100,000 annually.
He/she might be expected to receive $40,000 as base and achieve 10% of his/her annualized sales goal of $600,000 as commission. In this way, the employer can position the compensation ceiling as unlimited.
In my background, I have seen Sales Executives—very good Sales Executives—compensated at a rate almost as high as the CEO of a company. A good CEO wants his best Sales Execs to make high compensation because the Sales "psychology" can be defined as "the more you do, the more you make."
This type of Base + Commission structure has an infinite number of variables that can be applied back against it to modify the program, but the explanation is solid.
Over the years, I've seen a phenomenal number of variables applied to sales performance criteria, but the old saying that a "Salesman eats what he kills" can generally be applied to mean that as the sales exec builds the company revenues through his/her efforts, he/she shares in the revenue generated.
I hope this is helpful to you. If I can be of further assistance, please don't hesitate to email or contact me. We've been successful in setting up successful compensation programs in the past; perhaps some of our experience might be of assistance.
With best regards,
Alan Guinn
Managing Director
The Guinn Consultancy Group, Inc.
From United States, Bluff City
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Another form of Sales compensation is referred to as "Base plus Commissions."
A sales executive would be paid a base compensation rate—normally representing a projected 20% to 40% of his or her potential income base for the year—with all benefits reductions taken from this base compensation; he or she is awarded commission as a percentage of total revenue volume sales achieved on behalf of his/her employer.
Let's say the Sales Exec expectation is $100,000 annually.
He/she might be expected to receive $40,000 as base and achieve 10% of his/her annualized sales goal of $600,000 as commission. In this way, the employer can position the compensation ceiling as unlimited.
In my background, I have seen Sales Executives—very good Sales Executives—compensated at a rate almost as high as the CEO of a company. A good CEO wants his best Sales Execs to make high compensation because the Sales "psychology" can be defined as "the more you do, the more you make."
This type of Base + Commission structure has an infinite number of variables that can be applied back against it to modify the program, but the explanation is solid.
Over the years, I've seen a phenomenal number of variables applied to sales performance criteria, but the old saying that a "Salesman eats what he kills" can generally be applied to mean that as the sales exec builds the company revenues through his/her efforts, he/she shares in the revenue generated.
I hope this is helpful to you. If I can be of further assistance, please don't hesitate to email or contact me. We've been successful in setting up successful compensation programs in the past; perhaps some of our experience might be of assistance.
With best regards,
Alan Guinn
Managing Director
The Guinn Consultancy Group, Inc.
From United States, Bluff City
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Performance appraisal for sales exe.doc