Commission pay structure

The elements of commission plans include the goals, measurements, timing and rewards. The combinations are almost infinite but patterns may be found in some industries. Here are a few key considerations:

- Goals should tie directly to the business plan and consider both sales volume and profitability.

- Measurement should be clear and unambiguous.

- Timing should be near enough term (usually less than a year and sometimes immediate) so it is motivating.

- Reward percentages or sums should be fair and consistent with the industry.

- Adjust the compensation to match changing goals but be careful not to confuse or demoralize the commission staff.