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Quota-Based Incentive Compensation Plans
These quota-based plans have a single quota-based performance measure,and are designed for use with a base salary. These plan designs work well when performance objectives can be established with reasonable accuracy and consistency. Example performance measures used in quota based plans are sales quota achievement, gross margin dollars quota achievement, or booked revenue quota achievement. Each plan is customizable, and includes an earnings calculator for illustrating payout mechanics. These plans can be modeled using the web-enabled flash file located here . Each plan also has an accompanying down-loadable spreadsheet (members, please login to access these), listed below.
Launch earnings calculator
Downloadable Plans
- Simple commission plan. This plan has a single commission rate, calculated based on target earnings and target performance expectations.
- This plan adds a threshold performance level to the bonus formula. Below threshold performance, no incentives are earned.
- This plan adds an additional over-quota payout rate that decelerates earnings once the plan's upside incentives are achieved.
Commission-Based Incentive Compensation Plans
These commission plans have a single performance measure, and can be used with or without a base salary. These are best suited for volume-oriented performance pay ? in rewarding achievement of sales, gross margin dollars, or booked revenue, for example. Each plan is customizable, and includes an earnings calculator for illustrating payout mechanics. These plans can be modeled using the a web-enabled flash file located here. Each plan also has an accompanying down-loadable spreadsheet (members, please login to access these), listed below.
Launch earnings calculator
Downloadable Plans
- Simple commission plan. This plan has a single commission rate, calculated based on target earnings and target performance expectations.
- Commission plan with two performance tiers. This plan adds an accelerated payout rate for performance that exceeds expectations.
- Commission plan with three performance tiers. This includes both an accelerated payout rate for over-target performance, and a threshold performance level, below which commissions are not paid.
- Commission plan with four performance tiers. This plan adds a de-accelerated rate for very high achievement.
Quota Plans with Profitability Multipliers
These plans include a profitability multiplier,? which rewards for achievement of profitable sales or volume. Plans may have one or two volume quota components, and one multiplier component tied to the profitability percentage of credited sales. Managers can use these plans to encourage both volume attainment and profitable sales; these plans are especially useful for selling environments that are price-sensitive and where sellers have pricing discretion. These plans are intended for use with a base salary, but have adjustable weightings for establishing the right pay mix and performance emphasis. Each plan also has an accompanying down-loadable spreadsheet (members, please login to access these), listed below.
Downloadable Plans
- Single quota component with profit multiplier bonus. This plan uses a four-tier bonus formula for quota achievement, with an accelerated rate for over-quota performance. A second profit multiplier component rewards for profitability attainment based on profit percentage.
- Two quota components in this plan allow management to place additional emphasis on a strategic product, segment, or market, while still rewarding for overall quota achievement. A third component, the profit multiplier bonus, rewards for the profitability of volume achieved in the plan's quota achievement components.
