Two new books counsel growing company owners on how to pay their salespeople.
CEOs tell us one of their biggest headaches is figuring out the right way to pay their salespeople. Should you offer straight commission (the traditional choice of cash-strapped companies) or some combination of salary and commission? And what about bonus plans? Two new books geared to small, growing companies shed light on the process. Both are loaded with company examples, sample forms, and work sheets.
James F. Carey's Complete Guide to Sales Force Compensation (Business One Irwin, Homewood, Ill., 1992, $65) lays out the many shades of compensation in simple terms. It's also a handy resource to use if you want to revamp your pay scheme -- from, say, paying commission "from booking" to commission "on billing." Also clearly explained are incentive formulas, from the popular "flat rate" to the less common "step-up."
Managing Sales for Business Growth, by Robert J. Calvin (AMACOM, New York City, 1991, $27.95), also serves up lots of helpful information on compensation, backed up by the latest statistics from leading sales journals and research houses.