A good sales compensation plan meets seven requirements.
- It provides a living wage, preferably in the form of a secure income. Individuals worried about money matters do not concentrate on doing their jobs well.
- The plan fits with the rest of the motivational program-it does not conflict with other motivational factors, such as the intangible feeling of belonging to the sales team. iii. The plan is fair-it does not penalize sales personnel because of factors beyond their control-within the limits of seniority and other special circumstances, sales personnel receive equal pay for equal performance.
- It is easy for sales personnel to understand-they are able to calculate their own earnings.
- The plan adjusts pay to changes in performance.
- The plan is economical to administer.
- The plan helps in attaining the objectives of the sales organization.
