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[Company Name] Sales Representative Incentive Compensation Plan Worksheet

PLAN SUMMARY
Pay Mix % 47% 53% 100% Payout Plan Component 35,000 Base Salary 40,000 Target Incentive Pay 75,000 Target Total Compensation (TTC)

PERFORMANCE EXPECTATIONS
Performance Below Target Target Over-Target 0.0 Sales Revenue Achieved to 1,000,000.00 1,000,000.01 or more Description 999,999.99 Incentives are earned at the below-target rate.
Target incentive pay is earned at this performance level. Eanring potential is un-capped and payouts continue over this level.

HOW INCENTIVE COMPENSATION IS EARNED


Plan Component Commission on Sales Revenue Achieved Weighting 100% Target Incentive 40,000

COMMISSION PAYOUT TABLE


Sales Revenue Achieved All Sales Revenue Achieved Commission Rate 4.00%
Enter Sales Revenue Achieved:

PAYOUT EXAMPLE AND CALCULATOR


Sales Revenue Achieved 1,250,000.00 Commission Rate 4.00% Payout 50,000.00

1,250,000.00

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193099117.xls.ms_office

Plan Design Decisions and Spreadsheet Instructions


Values that can be changed are highlighted in blue font. To reduce unintended errors, the spreadsheet is protected, except for blue-highlighted cells. Unprotect the sheet by selecting Protection/Unprotect Sheet from the Tools pull-down menu. 1. Establish Total Target Compensation (TTC). TTC represents cash compensation at target performance, including base salary (if any) and incentive compensation. TTC should be determined by market-competitive pay rates, relative pay for other positions within the firm, and the overall contribution of the position. Enter TTC in cell C10. 2. Establish plan mix percentage and base salary. Not all incentive compensation plans use a base salary. If no base salary is desired, enter "0" in cell B8. Plan mix is a measure of risk in plan earnings. It is calculated automatically by the spreadsheet. Plan mix percentage is base salary divided by TTC. Target incentive is calculated automatically, by subtracting base salary from TTC. Generally, plan mix is lower - and base salary as a percentage of TTC is lower - when the sales position can directly impact sales results, without the contribution or support of others the selling cycle is shorter the offering is more transactional. Plan mix is higher - and base salary as a percentage of TTC is higher - when the sales position can directly impact sales results, without the contribution or support of others the selling cycle is shorter the offering is more transactional. 3. Establish target performance expectations. At "target" performance, the plan delivers 100% of the target incentive. Target performance represents the performance goal for the position. Enter target performance expectations in cell E16. 4. Specify the plan's performance measure. Enter the performance measure used to deliver incentive compensation in cell B22. For most volume-based commission plans, this is typically sales revenue, gross margin dollars, contract revenue, etc.

193099117.xls.ms_office