Selling Rewards

Paying for performance in your sales force

Reilly P | HR Network Paper MP74 | Institute for Employment Studies | Oct 2006

There is evidence that sales force compensation has changed very little over the past few years, even though the role of many sales professionals has done so.

The majority of UK companies use a combination of salary and commission for their sales staff because they assume that incentives linked to performance outcomes will stimulate effort.

However, over-reliance on variable pay, or a poorly designed incentive scheme can create problems, especially if based on transaction volume but not customer satisfaction.

Getting the right combination of base salary, variable pay and non-financial rewards right depends largely on the nature of the sales process, together with the type of company and the products and services it sells. It also needs to acknowledge that individuals tend to be motivated by different things, and that these change throughout someone's career.