1.

Nature of the Product Size of the market Financial Stability of the firmFactors
infuencing the design of acompensation plan
2. Allied Methods Drawing account and Commission Plan Salary plus Incentive Plan(
Combination Plan) Bonus and Incentive Straight Commission Plan Straight Salary
PlanTypes of Compensation Plan1. Financial Compensation
3. Sales Contests Perks Expense Accounts Fringe Benefits Recognition Programmes
Promotions2. Non-financial Compensation
4. Steps in designing a compensationplan1. Determine Sales Force and Compensation
Objectives2. Determine Major Compensation issues3. Implement Long term and Short term
Compensation Plans4. Relate Rewards to Performance5. Measurement of Performance6.
Appraise the Compensation Plan
5. Frequent travelling, problems with work-life balance Constant rejections by customers,
lower self- esteem, customer complaints about product and service. Importance of a
motivated sales force: WHY?Sales Force Motivation
6. Principle of Securityo A motivation programme should aim at providing a sense of security
to the salesperson he should worry less about the future and contribute to sales without
looking at issues about his basic survival and satisfaction of his physiological needs What
principles should a sales manager follow while designing a motivational programme for
salespeople? Most incentive plans designed in organizations are based on the application
of the below mentioned principles Principles
7. Principle of approvalo Salespeople expect that the good work by them be praised,
approved, and rewarded by the salesmanager Principle of achievemento Salesperson
should know in advance the achievement he will have from the motivational programme, so
that he will put more effort into achieving the desired goal
8. Principle of advancemento Every salesperson looks at progress and growth inside the
organization Principle of loyaltyo If there is a high sense of social respect for each other,
the salesperson tends to develop loyalty towards the organization and respect towards the
seniors and managers.
9. Principle of human behaviouro Sales manager should treat salespeople as human beings
with emotions, aspirations, and values. Principle of leadershipo Programs should be
designed to nurture salespeople for future leadership roles.