{"id":114936,"date":"2022-12-07T21:33:22","date_gmt":"2022-12-07T21:33:22","guid":{"rendered":"https:\/\/monday.com\/blog\/?p=114936"},"modified":"2023-01-31T16:41:54","modified_gmt":"2023-01-31T16:41:54","slug":"commission-plan","status":"publish","type":"post","link":"https:\/\/monday.com\/blog\/crm-and-sales\/commission-plan\/","title":{"rendered":"Why you should have a sales commission plan for your team"},"content":{"rendered":"

A competitive pay structure and commission plan are essential to bringing in and retaining the best sales talent. According to a 2022 study<\/a> on the Great Resignation by the PEW Research Center, most people who quit their jobs during that time did so because of low pay and no opportunities for advancement.<\/p>\n

Part of providing competitive pay is offering incentives like a commission structure combined with a salary. But before you implement a pay structure like that, you need to map it out<\/p>\n

Let\u2019s look at what exactly a commission plan is, how to build one, and how monday sales CRM can help you get one started at your business.<\/p>\n

Try monday sales CRM<\/a><\/p>\n

What is a commission plan, exactly?<\/h2>\n

A sales commission plan is an outline used for a pay structure for your sales team. That pay structure usually involves two parts: a base salary and a certain amount of the total from each sale they make \u2014 the commission.<\/p><\/blockquote>\n

The sales commission plan outlines how much of your team\u2019s salary will come from base pay and how much they\u2019ll make on commission. You might choose to pay your team 70% salary and 30% commission, for example.<\/p>\n

There are multiple pay structures that incorporate commission, but you\u2019ll want to stay away from commission-only pay that has no base salary at all or \u201cdraw against commission\u201d structures where employees end up having to pay their employer back. These models are unethical and can cause burnout that, needless to say, is bad for morale.<\/p>\n

Is a commission plan a contract?<\/h2>\n

A commission agreement is the actual contract specifying that someone is being paid on commission. That agreement is part of the overall commission plan, but the plan itself is not a contract \u2014 just a framework for the team\u2019s commission-based pay.<\/p>\n

Why are commission plans important?<\/h2>\n

Commission plans, when appropriately structured and implemented, are an incentive for sales team members to perform higher and stay longer.<\/p>\nBeing paid accordingly for going above and beyond makes them feel valued at work, and people who feel valued in their jobs stick around longer.<\/span><\/a>\n

Commission plans can also provide a bird\u2019s-eye view of your sales efforts, showing you where things fall short or where they\u2019re thriving. If, for example, there\u2019s something bogging down the process of moving a lead through the sales funnel, you can see it in the form of stats like completed deals or successful calls decreasing.<\/p>\n

How to make your own sales commission plan<\/h2>\n

When deciding how to structure your own commission plan, there are several elements to consider if you want it to succeed. You\u2019ll want to know what resources you have at your disposal, and the smartest way to allocate them.<\/p>\n

To do that, look at figures like:<\/p>\n