Developing commission structure

General rules typically guide the logic of commission pay structure. These are often applied in developing pay plans. Yet, typically each industry will be different when calculating leveraged compensation plans.

The best place to find out what others are doing is to look within your industry. Talk with the staff of the national organization that serves your industry. It's likely that they will have some models or other information that will be useful, or someone in the industry you can talk with.

Poll your friends and industry contemporaries to see what they're doing. You should find someone who has made all the mistakes and found a successful approach that will help you.

Commission pay plans can be subject to fraud and manipulation. Further, an improperly designed plan or frequent changes can demotivate rather than motivate. It is vital to do your homework up front.