Tess C. Taylor, PHR, The HR Writer
A big challenge for many growing businesses is how to fairly compensate salespeople when cash flow is often not stable yet. The norm is to hire sales professionals strictly on a commission only basis, hoping that they will outperform your expectations and bring in new business. Others try offering a low salary with tiered commissions to reel in sales.
On the one hand, a commission-based system is supported by the incentive of new sales and upsells to current customers. On the other hand, sales people may not be overly motivated by this approach, resulting in less than stellar performance. How can a company leverage the best of a salary and commission compensation plan to improve sales performance?