Updating or changing incentive programs can be effective in raising productivity and motivation, Forbes reported. The most common commission programs were developed in the 1950s, and many companies are giving the standard formula a makeover. Flipping the equation The standard pay system for sales-based jobs typically abide by a 60/40 rule, in which 60 percent of compensation is base pay, while 40 percent is in commission. Some companies are looking to flip the equation, offering a larger base pay and smaller commission rate. While this may seem counterintuitive to motivating sales teams, this method creates loyalty between employees and employers, and provides sought-after financial stability among salespeople that is not entirely dependent upon the market. This also allows for flexibility and understanding among employers who recognize that some clients are better than others. Some clients are fickle or make decisions slowly, affecting sales numbers in the short run. When short-term sales goals are missed and employees are not rewarded with large commissions, this may say to staff members that employers do not recognize that the clients some workers have been given are more difficult than others. According to Forbes, experienced entrepreneurs will learn to understand that some clients are simply bad leads, and that team members should not be punished for having been given these clients. Customize plans There are approximately 9 million Americans working in sales today, and each of them is different. Some may work well under high commission rates, while others will benefit from more stable pay. Some companies put sales professionals on different plans depending upon how long they have been with the company. For example, new staff may be given higher commission rates, then graduate to more stable base pay after a certain amount of time, or vice versa. Each company is as different as their employees, an an individualized incentive program for each company is what is most needed in the modern work environment.
