I was hoping you could help me with a Sales Commission question.To set the scene, we want to target quality Business Development people – niche skill set and specialist experience for this engineering company, Hay level 19-20, on about AED 50,000+.For these type of Sales people, I feel that threshold targets (where they get nothing below this) and ceiling targets, capped at 60% annual basic, feels right and is aligned to the top company scheme as well as suggested commission caps. But again, different views on this everywhere!The CEO doesn’t like there being a Threshold or a Cap but these are well-paid BD people, not your low-paid, high transactional sales people – hence I feel it’s more appropriate.What are your thoughts?
Thresholds in sales incentives
Caps in sales incentives for business development roles
- windfall clauses (handling the unexpected (and not forecasted) mega-deal that “landed” on the sales person without much work on his/her part)
- and clawback clauses (recovering all or some of the variable compensation in case of poor performance or inappropriate behaviour for example) or even clawback on quarterly advances if year-end performance is not at the expected level.
- Yes for a threshold in a sales quota for a business development role
- “It depends” for a cap
How about you ? Please share your experience with thresholds and caps for business development roles in the comments below !