Sales Compensation Blog

Is your compensation program too expensive? Your CEO probably thinks so. Have you allocated too little for incentive pay? Your reps probably think so. You feel like you can't win! It is a delicate balancing act, but it is possible to add a little ‘science' to the process.

It starts with understanding your company's overarching compensation philosophy. Your philosophy will depend on how you hire and grow your employees. For example, your company may want you to pay top dollar to hire the best and be in the 90th percentile of pay. Others may want to fall directly in the center of the range - i.e. 50th percentile of pay.

Next, you need to find reputable sources for compensation data. Getting details on sales compensation is harder than general compensation. There is a plethora of firms offering statistics on compensation data but you really need to read the fine print to be sure it covers sales. They range in price from $500 - $6000 per year.

The most important things to look for are:
• What industries are included?
• What job roles (read the descriptions)?
• Do they have statistics on sales compensation? At a minimum, you should be able to get target total compensation and the salary/incentive mix.
• Can you segment the information by geography and company size?
• How fresh is the information? Do they only update once a year? Or is it ongoing?

Best practices recommend you pick 2-3 sources because the level of quality across all job roles can vary even within one source. Here are a handful of favorites for High Tech. All cover sales roles in sufficient depth: