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Sales Commission Program, The commission program is most frequently understood as the variable element of the overall compensation package for sales. The overall commission received is based on the performance and personal objectives of each salesperson. Your commission system links a sales representative’s output to the amount of money they will receive each pay period. It’s no secret that accountability yields results and a properly designed commission system are a great method to reward exceptional performance.
Sales compensation schemes come in a variety of sizes and forms because no one size fits all. Some examples include salary/hourly + commission, commission-only, tiered commission, residual commission, and variable-rate commission. The simplest and most widely applied strategy among these is to pay a specific percentage based on the earnings from a single sale. Simply put, a sales representative who closes a $500 contract at a 5% commission rate makes $25 on each sale.
