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STREET SMARTS

Norm Brodsky on Sales Compensation
 

The three factors to determine salary plus bonus compensation

Norm Brodsky is a veteran entrepreneur.

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Dear Norm,
My CEO and I are intrigued by your arguments about the benefits of changing salespeople's compensation from base plus commission to salary plus bonus. Would you mind sharing a copy of your sales compensation plan?

-- Daniel Bird, TestOut
Pleasant Grove, Utah

We don't have a written plan, but I can easily summarize what we do: We pay salespeople the same way we pay everyone else. That is, they receive a living wage and an annual bonus based on three factors: the individual's success, the team's success, and the company's success. I changed to this system because I wanted our salespeople to feel part of the company and to be seen by the other employees as teammates. When your salespeople's compensation plan is fundamentally different from the one for your operations people, it's extremely difficult, if not impossible, for that to happen.

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Last updated: Apr 1, 2010

Street Smarts columnist and senior contributing editor NORM BRODSKY is a veteran entrepreneur who has founded and grown six businesses.
@NormBrodsky




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