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June 29, 2010
Perennial Challenges With Commission Pay Plans

David Wudyka discusses perennial challenges for Commission Pay Plans (CPP) in a BLR webinar entitled ‘Commission Pay Plans: How to Motivate Your Sales Staff in a Roller Coaster Economy’. He describes the perennial challenges associated with CPP and provides a list of these challenges below:

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  • Your sales compensation costs are not currently competitive in today's marketplace
  • Your sales compensation costs are not sufficiently discriminatory
  • Your sales administration processes are not 100% workable
  • Your CPP's rules and levels are too complicated for your own good
  • Your sales force profile is really out of whack, relative to your markets and the economy at large
  • Your sales force is being blamed unfairly for mistakes made by other departments and your top leaders

The word discrimination does not mean discrimination as in discrimination against a person or discrimination with respect to races or ethnicities. Rather, it is commission-related terminology and it implies that there isn’t enough connection between the compensation that sales personnel received and the output that has been produced. Another term used with regards to commissions is line of sight. This refers to what people do and how they are rewarded for what they do.

David Wudyka, SPHR, MBA, BSIE, is the founder and managing principal of Westminster Associates (www.westminsterassociates.com), a Massachusetts-based human resource and compensation firm that specializes in pay, performance, and productivity issues. He brings more than 30 years of professional HR and compensation experience to the table for clients around the country.

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