Choosing a sales compensation plan is an important decision. However, there is no one-size-fits-all approach. What are some of the factors involved in the compensation process? Are there any best ways to compensate sales personnel? After reviewing this week’s resources and your research, in your own words identify at least three factors involved in the compensation process. Share with your classmates your plan and why you feel it will be effective and adequately motivate your sales team towards organizational goals.


Initial post is at least 250-300 words,

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Post -1

Compensation may be described as any form of payment given to the employee as a form of exchange for the work and duties performed in one’s business, and it is usually more than the employee’s regular paid salaries and perhaps may extend to other deferent types of benefits (Pandita & Bedarkar, 2015). however not every employee is subjected or entitled to the compensation plan, this is attributed to the existence of many business factors that are involved in the compensation process which affect the type and amount of value compensated (Economics discussion, 2016). These factors may be broadly categorized into external and internal determinants. As for the external factors they include; labour and market prevailing conditions, current and future projected economic status, prevailing wage level, government control cost of living, among others. Internal factors are compensation policy of the organization, employee’s worth as well as worth of the job.

Let’s have a look at some of the key factors such as the worth of a job in which case the organization base the pay and compensation level with the quality of work and duty rendered (Economics discussion, 2016). For example, heavy and technical roles that require too much brainpower and creative earn high pay as well as compensation. The other factor is employee’s worthiness whereby organizations conduct progressive appraisals to determine high performing employees who will, in turn, be compensated highly unlike non. Performers. Besides that, the cost of the living standard may also influence compensation process since a change in compensation is attributed to the consumer price index that is used to measure an average change of buy price of basic items like food and clothing as well as medical services (Theintactone., 2019).

It is worth understanding that compensation process, and as a strategy will encourage employees more, so sales personnel to feel valued as human beings and in this respect, they will devote to work limitlessly with a lot of vigour to accomplish organization’s objectives. I suppose that when compensation is done, it will help to improve organizational effectiveness and also help retain talented and product sales personnel for much longer productive time (Theintactone., 2019).


post -2

The compensation process is one of the huge causes of disputes between employers and employees. The sales team is a crucial part of an organization due to the fact that they relate directly to customers and have a better knowledge of the market. Thus, their compensation plan should be keenly developed to ensure that there are no disputes between the employer and the sales team. Various factors are affecting the compensation plan in an organization (Cichelli, 2010).

One factor is the compensation policy of an organization. This is the organization’s policy on payments. This attracts different talents; for instance, organizations with better payments attract better talents and obtains a lower cost per unit labor compared to those that pay poorly. Another factor is the affordability of employers where organizations with high profits and large market shares are capable of high payments than smaller businesses that are not yet established. An additional factor is the worth of a job. The worth of a job influences the organization’s level of payment. Salaries of technical jobs, jobs that exercise brainpower, and creativity oriented jobs are normally higher (Colletti & Cichelli, 2005).

For organizations to get the most out of their sales team, they have to develop the best compensation team. This is because it is the most vital team in increasing the organization’s revenue. The best way to motivate the sales team is through improving their salaries, commissions, and bonuses. Their commissions should be on the basis of the higher the percentage of income, the higher the commission. They should also offer incentives to the best performing salespersons in order to appeal to the competitive spirits of the sales team (Singh, 2007).