David Wudyka discusses the right Commission Pay Plan format in a BLR webinar entitled ‘Commission Pay Plans: How to Motivate Your Sales Staff in a Roller Coaster Economy’. He states that there is no set answer in response to questions regarding the right commission plan format for organizations. However, experts in the area of pay plans are frequently asked to provide input regarding the right pay plan to use in an organization. There are some choices that are better than others. Recent national surveys have identified a few trends organizations should consider as they examine their current Commission Pay Plan (CPP) structures and this information is presented below:
- With combination plans, the most popular ratio of base pay to commissions among U.S. sales employers is 60/40
- Among employers offering straight salary plans, growing numbers have said in 2008 and 2009 surveys that they’re investigating adding commission components for the first time
- 78 percent of surveyed employers said gross sales revenues are the primary metric in their CPPs, followed by units sold/orders taken and new accounts opened
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. He speaks and writes frequently on HR and compensation issues, and he earned his master’s degree from Syracuse University.