How to Create a Good Compensation Package
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Compensating your sales force presents a particular challenge because packages must be extremely competitive and should provide adequate incentives to motivate employees to do their best.

The key to creating a good compensation package is balance. Most salespeople don't want to be solely dependent upon

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either commissions or salary. Plus, providing adequate and competitive compensation that's based exclusively on either salary or commission most likely won't attract or retain talent, motivate your sales staff, or allow your company to achieve its maximum profitability.
Striking a balance between salary and commission is probably as much art as science, as it depends on your goals. A compensation package that emphasizes salary over commission will allow you to make greater demands on your salespeople and how they spend their time. A pay package that emphasizes commissions will motivate your salespeople to spend more time selling and booking new orders rather than other work that won't result in new sales.

Although businesses compensate salespeople in a wide variety of ways, most use a combination of salary and incentive components, along with common benefits such as health insurance, a retirement savings plan, and paid time off.

Base Salaries
Providing a base salary that assures salespeople a steady income is a good idea. A guaranteed salary provides salespeople the comfort of knowing that despite good and bad economies, streaks and slumps, they can maintain their current lifestyle.

Salaries alone, though, are not the brass ring. And salespeople won't necessarily push themselves without additional incentives. At the same time, salespeople want to know that if they make the extra effort they will be adequately rewarded for their hard work....