Sales Compensation Plan: Model, Types, How to Create It with Examples

There are a few domains that are as dynamic and challenging as sales. The performance of sales reps can mean the difference between being a market leader in the industry or the bottom feeder with diminishing sales. Being the second-most-in-demand job, there’s an abundance of sales reps in the job market.  

However, finding a top performer is hard, and it’s harder to retain one with the ever-increasing competition for the talented. In any sales environment, the primary driver of motivation and right sales behaviors is compensation. It’s essential that companies implement the right sales compensation plans to drive employee satisfaction and engagement. 

What are sales compensation plans? 

Sales compensation is how much money a sales representative is paid in a year. It includes components such as a base salary, commissions, and incentives to motivate the reps to meet or exceed their sales quotas. 

A sales compensation plan outlines the structure that defines how the sales rep will be compensated based on their performance. The plan includes full details about compensation for sales reps, such as the base salary, bonuses, commissions, and benefits. 

Avant d'examiner les différents exemples de plans de rémunération des ventes, il est important de comprendre certains des concepts de base impliqués dans la structuration des plans : 

1. Sales quotas 

Sales quotas are a set number of revenue targets that applies to individual or group of sales reps. Quotas are typically time-bound such as monthly, quarterly or annually.

The quotas are the minimum sales the reps must close before they become eligible for commissions. For example, if the reps have a quota of 50 sales per month, they start earning commissions after the 50sale is reached. 

2. On-target earnings 

La rémunération sur objectif (OTE) est la somme du salaire de base et des primes que les commerciaux recevraient s'ils atteignaient leurs quotas ou leurs objectifs. Ils donnent une vision réaliste de la rémunération totale des commerciaux pour l'année. 

3. Pay mix 

La composition de la rémunération est le rapport entre le salaire de base et la rémunération variable ou les commissions qu'un représentant gagne. Ce ratio donne un aperçu rapide de la répartition de la rémunération, de sorte que les représentants savent ce qu'ils gagneront dans le cadre de chaque plan. Par exemple, si la répartition de la rémunération est de 60:40, cela signifie que le salaire de base représente 60 % de l'OTE et que les commissions représentent 40 %. La répartition de la rémunération peut varier en fonction de l'organisation et des produits vendus. 

4. Sales accelerators 

Sales accelerators are an extra boost to incentives once the sales reps cross their OTEs. That means their commission rates go higher when they exceed their quotas or targets.

5. Sales decelerator 

Les ralentisseurs de vente sont destinés à pénaliser les représentants peu performants. Ils interviennent souvent entre 40 et 60 % du quota du représentant. Par exemple, si la commission est de 10 % lorsque le représentant atteint son quota, un décélérateur de 5 % peut être mis en place pour réduire la commission si le représentant n'atteint pas son quota. 

6. Récupérations 

Clawbacks are frequently used in service-based companies and happen when a customer churns (stops using the product or service). For example, if the subscription target is set at 4 months, the sales rep will lose their commissions if the customer churns within that time. Clawbacks encourage sales reps to follow high-quality leads. 

7. Sales Performance Incentive Funds (SPIFs) and Sales contest 

Also called sales contests, SPIFs are designed to incentivize high performance in the sales teams. Sales contests are held on a monthly basis for a short period with rewards such as a one-time cash prize or non-monetary rewards such as team dinners or outings. 

Why are sales compensation plans important? 

Being a sales representative is an incredibly demanding job. Robust compensation plans are keeping the reps motivated and engaged as the role has one of the highest churn rates in the industry with 61% of the reps feeling under-appreciated. 

A well-designed compensation plan sets fair standards and drives healthy competition among the teams to perform better. The strongest impact a good compensation plan has is to reward the sales reps fairly and make them feel valued. Surveys show that 91% of sales reps take pride in their jobs, and one of the biggest factors that contribute to it is compensation. 

Les plans de rémunération des ventes présentent également d'autres avantages, tels que 

• Supporting the recruitment strategy through attractive compensation and incentive programs. 
• Accroître la satisfaction des employés en leur offrant une rémunération correspondant à leurs compétences. 
• Aide à la planification financière en projetant le budget des salaires. 
• Établit une base pour les indicateurs clés de performance (ICP) afin de suivre l'efficacité de la compensation. 

How to create a sales compensation plan? 

Your sales staff doesn't really care about technical terms. You know "incentives" and "commissions". They want money. So, it's up to you to sell your managers on sales commission plans that actually motivate top performers.

There are a number of steps involved in building and fine tuning an effective sales compensation plan. So here they are: 

1. Setting payment targets 

The first step to compensation planning is to look at what the market is paying. The payment target needs to stay around the market’s median income to be competitive. Although it may vary by geographic location, it acts as the foundation of the compensation structure, therefore must be chosen carefully.

Researching platforms such as LinkedIn and Glassdoor is a good place to figure out the average pay for the reps in the industry. The pay should also take commissions into account to come up with a base for the compensation plan. 

2. Decide on the regime of the compensation plans 

Whether it is direct pay or base salary with commission, it is important to choose a clear regime for payouts or risk losing the top performers. The compensation plan should fit the roles and the expected results from the sales team.

3. Inclure chaque membre 

Pour maintenir la motivation des vendeurs tout en promouvant l'égalité, tous les vendeurs doivent être inscrits au système de plan de commissionnement des ventes. Expliquez le fonctionnement de la structure d'incitation et le moment où les commissions sont versées. Le modèle de plan de commission peut alors être déterminé en fonction du rang, des objectifs prévus, de l'influence sur les ventes et des étapes franchies. 

4. Establish measurement metrics 

Les programmes de rémunération doivent être mesurables afin d'en évaluer l'efficacité, car chaque plan comporte ses propres incitations. Les indicateurs clés de performance (ICP) doivent donc être basés sur l'adéquation entre les ventes réalisées par les représentants et le programme de rémunération. Utilisez des indicateurs clés de performance tels que 

• Taux d'augmentation des ventes 
• Marge bénéficiaire 
• Quotas 
• Pénétration du marché 
• Ventes conclues par le représentant 
• Taux d'appels d'accueil et de démonstration 
• Temps de prospection et de conversion des prospects, etc. 
• Prospects ayant un potentiel de vente 
• Affaires gagnées par rapport aux affaires perdues par les clients potentiels 

5. Assigner des objectifs et des quotas 

Just before taking action the expectation for teams and individual reps needs to be set in the form of quotas, targets and benchmarks. The expectation clarifies what each rep needs to do and how they are paid for it.

Once the targets and quotas are established it becomes possible to assign and track each sales rep against the established key objectives. 

Different types of sales compensation plans 

Employees in sales can get paid in different ways, such as hourly wages, salary, commissions, and bonuses. The sales compensation plan effectiveness can be gauged by the sales rep's engagement and their performance in terms of meeting or exceeding their quotas.  

Different companies tailor their commission plans according to their industry and how their business is conducted. The following examples reflect typical sales compensation plans across different industries: 

1. Rémunération salariale 

With the salary-only compensations model, sales reps are paid an annual salary without commissions or incentives based on their performance. The all-inclusive compensation will be agreed upon with the rep ahead of time without variables.  

The main benefit for the company with this model is the simpler management of finances. The method also benefits underperforming sales reps as they will be compensated even when sales quotas aren’t met.  

The drawbacks with the model are plenty, as it takes away the drive for competitiveness and incentive, which encourages sales reps to perform at their peak. The star performers feel unenthusiastic about being in the same league as reps who slack once their quota is met. 

La rémunération exclusivement salariale peut être utilisée dans de nombreux secteurs, de l'industrie manufacturière au commerce de détail. 

2. Salaire de base plus prime 

Pour pallier le manque d'enthousiasme des commerciaux dans le cadre d'un plan purement salarial, il est possible d'ajouter une prime pour les motiver. Généralement convenues à l'avance avec les représentants, les primes sont gagnées lorsque ces derniers atteignent des objectifs spécifiques. 

Par exemple, le représentant commercial reçoit un salaire de base de 50 000 USD et une prime de 2 000 USD pour le dépassement des quotas, par exemple la vente de 50 produits. 

3. Salaire de base plus commissions 

The base salary plus commission is the most common plan used and constitutes close to 48.8% of the sales model used by companies. The compensation can be divided into a fixed base salary and variable compensation.  

• The pay mix is typically about 60:40 on an average across most industries 
• Or a less aggressive 70:30 if the product being sold is technical and the reps need to educate the customers. 

Because of its potential to motivate the star sellers of the teams, the base salary plus commission plan is used by many industries. The Brigade Group, for example, calculates an average base salary of USD$79,000 with an OTE of USD$158,000 for SaaS account executives. The compensation plan is also used in industries such as Edtech, financial services, retail outlets and many more small to medium businesses. 

4. Commission uniquement à titre de compensation 

Dans le cadre d'un plan de commissionnement, les commerciaux ne perçoivent pas de salaire de base, mais leurs commissions sont basées sur les ventes qu'ils réalisent. Les taux de commission sont généralement plus élevés dans ce type de plan, car il n'y a pas de salaire de base. 

A fine example for the plan is the real estate industry where the brokers and sales reps make commissions on the total value of the property. As of 2022, the total gross commissions in the real estate industry hovers around 4.94%.  

Commission only compensation is also used in industries such as real estate, fast-growing startups, products with well-defined sales cycles, non-customizable products, etc. 

5. Commission basée sur la marge brute 

While it’s important to motivate salespeople to score higher targets, it’s also essential that the company reaches its revenue goals. Sometimes sales reps end up focusing on low-value products that are easier to sell to meet their quotas.  

Excessive discounts are also a way taken by sales reps to close higher numbers and earn more. The gross margin or profit-based commission model can then be implemented to curb the issue. Changing the focus from higher quotas to higher profits drives the right sales behaviors and has a positive effect on the company’s bottom line. 

Car dealerships work on gross margin-based commissions and the sales reps typically earn 20%-30% of the profit. The plan can also be used in businesses such as car or hardware dealerships, wholesale distributors for SAAS or software services and B2B partner agencies. 

6. Commission absolue 

Dans le cadre d'un plan de commissionnement absolu, les représentants gagnent des commissions à un taux déterminé lorsqu'ils atteignent leurs objectifs. 

La commission absolue fonctionne bien dans les secteurs où les produits et les mises à jour sont bien établis, tels que les appareils médicaux, les appareils ménagers, les appareils agricoles et d'autres articles de quincaillerie. Le pourcentage de commission sur les produits peut varier de 1 à 10 %, voire plus si les ventes sont hors saison. 

7. Commission relative 

Les plans de commissions relatives prévoient des quotas prédéterminés qui déterminent les commissions perçues par les représentants. Les quotas peuvent être basés sur le chiffre d'affaires ou le volume des ventes. Ces plans peuvent être utilisés pour encourager les représentants à s'intéresser à des produits de plus grande valeur. 

Relative commissions are used by companies with well-established products that can afford higher commissions. Examples include manufacturing, wholesale, technical and scientific products. The commission rate can vary from 7-15%. 

8. Commission linéaire 

Le plan de commission linéaire est l'un des plans les plus satisfaisants pour les commerciaux, quel que soit leur niveau de performance. La commission est basée sur leur performance relative par rapport à leurs quotas de vente. 

Les plans de commissions linéaires fonctionnent bien dans les entreprises où les cycles de vente sont courts ou lorsque les représentants ont la possibilité de toucher des commissions importantes. 

9. Tirage au sort contre la commission 

Un plan de commission par tirage au sort est similaire à un calendrier des salaires, car les commissions sont payées à l'avance. Le représentant commercial doit alors récupérer le paiement anticipé pour le compenser. Il existe deux types principaux de commissions prélevées : 

• Recoverable draws: These payouts are similar to loans that the reps are expected to recover during the period. For example, if the sales rep draws USD$5,000 per month, they are expected to earn a minimum of USD$5,000 a month to make up for the loan. If they are unable to recover fully, the remainder amount rolls over to the next month. 
• Tirages non récupérables: Les tirages non récupérables sont des paiements qui ne sont pas censés être récupérés. Ils sont généralement proposés aux commerciaux en formation, car on ne s'attend pas à ce qu'ils concluent autant d'affaires au début. 

Les plans de commission par tirage au sort conviennent aux représentants et aux équipes qui débutent dans la vente. La pression exercée par les ventes constitue un bon point de départ pour les nouveaux venus. Ces plans sont également efficaces pour les produits hors saison dont les périodes de vente sont incertaines. 

10. Commission du volume du territoire 

Les plans de rémunération en fonction du volume du territoire sont utilisés lorsque l'on travaille avec des équipes de représentants commerciaux qui s'occupent d'un territoire défini. La rémunération est convenue sur une base mensuelle ou trimestrielle et, une fois la période terminée, la commission totale est répartie entre les représentants de l'équipe de vente. 

Les commissions sur le volume du territoire sont utiles pour les entreprises qui cherchent à s'implanter dans de nouvelles zones géographiques, telles que les services Internet par câble, la lutte contre les parasites et les services de toiture solaire. Toute entreprise qui a l'esprit d'équipe peut tirer son épingle du jeu avec ce plan. 

4 sales compensation plan examples to get you started 

Creating an effective sales compensation plan model requires careful consideration of each sales role within your organization. Every member of your sales team should have a compensation plan tailored to their responsibilities, experience level, typical sales cycle length, and the type of deals they handle. 

As you develop your sales compensation model, you’ll come across different structures, each designed to align incentives with your company’s goals. Below are four comp plan examples to help you get started: 

1. Sales development representative (SDR) compensation plan 

What it is: A combination of a lower base salary with commission or bonuses tied to lead generation activities. 

When to use it: Best suited for roles focused on generating and qualifying leads rather than closing sales. 

Why it works: Encourages SDRs to prioritize high-quality lead generation and meet prospecting targets. 

How to calculate: Typically includes a base salary with a bonus for each qualified lead or scheduled meeting. For example, an SDR might earn a $50 bonus for every lead that meets predefined qualification criteria. 

2. Sales representative commission-based compensation plan 

What it is: A mix of base salary and commission, directly tied to closed sales. 

When to use it: Ideal for sales reps responsible for closing deals with clients. 

Why it works: Balances income stability with motivation to drive revenue through successful deals. 

How to calculate: A sales rep might receive a steady base salary plus a commission—such as 5% of each closed deal’s value—ensuring a direct link between performance and earnings. 

3. Sales manager compensation plan 

What it is: A combination of base salary, performance-based bonuses, and sometimes a percentage of the team’s total sales. 

When to use it: Designed for sales management roles where the focus is on leading and developing a sales team. 

Why it works: Provides a stable income while offering incentives for maximizing team performance. 

How to calculate: A sales manager may receive a fixed base salary plus bonuses based on team key performance indicators (KPIs). For example, they could earn a 5% bonus on their team’s total sales revenue or additional bonuses for meeting team-wide sales targets. 

4. VP of Sales compensation plan 

What it is: A high base salary combined with performance bonuses, profit-sharing, or stock options. 

When to use it: Best suited for senior leadership roles responsible for the company’s overall sales performance. 

Why it works: Reflects the strategic importance of the role while incentivizing long-term revenue growth. 

How to calculate: Compensation typically includes a substantial base salary with bonuses linked to company-wide sales success. For instance, a VP of Sales might earn a 10% bonus based on the increase in total revenue under their leadership. 

Strategize your sales compensation plan with Compass 

Compass simplifies sales compensation plan models, helping businesses design, launch, and optimize commission plans 10x faster with no-code automation. Whether structuring channel sales compensation plans or sales compensation accelerators, Compass ensures efficiency, accuracy, and motivation. 

• Fast plan creation & automation – Build and deploy commission plans in minutes without coding with Compass. 
• Advanced compensation features – Implement spiffs, bonuses, multipliers, ramps, clawbacks, and more. 
• Transparent & compliant payouts – Automate calculations, track changes, and ensure global compliance. 
• Motivate & engage sales teams – Show real-time earnings, ai-powered nudges, and dispute resolution. 
• Data-driven optimization – Gain insights through predictive analytics, quota tracking, and payout trends to refine plans confidently. 

Réflexions finales 

Compensation is the primary motivator of the right sales behaviors in sales reps. To keep them engaged, it is vital to apply the appropriate sales compensation strategy to reward the reps fairly. To increase the sales compensation plan effectiveness, it is essential to introduce gamification to build a positive attitude towards work that can boost performance. 

With tools like Compass, businesses can automate plan creation, streamline payouts, and optimize compensation strategies using data-driven insights. By eliminating manual work and enhancing transparency, companies can retain top sales talent, boost revenue, and scale their compensation strategies with confidence. 

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