Five Common Flaws in Sales Compensation Formula Design and How to Address Them

#5 Misuse of advance design techniques

#5 Misuse of advance design techniques. This flaw is the result of using formula design techniques linkages, matrices, multipliers that may be either inappropriate or unneeded relative to the desired selling behavior and performance. Too often we see formula designs used complex ones in particular that do not solve the sales performance problem. The most common is to use multipliers or accelerated rates to mask overly aggressive sales quotas. Because complex formulas often add to sales force confusion about incentive pay, it is wise to first validate that a performance problem is solvable through the comp plan irrespective of formula type.

Five Common Flaws in Sales Compensation Formula Design and How to Address Them

By: Colletti-Fiss

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