Base salaries should be kept low enough to allow room to create sufficient incentive and motivation, but high enough to give some breathing room. Generally a base salary will fall somewhere between 15 and 40 percent of total compensation.
Commissions can be based on sales or gross profit. Commissions should be based on gross profit whenever the sales employee has any control over pricing. Generally, this will range up to 80 or 85 percent of total compensation.
Adding a bonus structure to a sales compensation plan can add incentive to reach new levels of performance.Bonuses should be big enough to incentivise employees to want to hit each level.Bonuses can be used to incentivise behaviours, values and best practice.
