{"id":8094,"date":"2021-09-23T11:47:00","date_gmt":"2021-09-23T01:47:00","guid":{"rendered":"https:\/\/www.pulserecruitment.com.au\/?p=8094"},"modified":"2023-12-01T06:12:20","modified_gmt":"2023-11-30T19:12:20","slug":"best-practices-for-commission-structures","status":"publish","type":"post","link":"https:\/\/www.pulserecruitment.com.au\/best-practices-for-commission-structures\/","title":{"rendered":"Best practices for commission structures"},"content":{"rendered":"

If a five-year-old can understand the commission structure, then that’s a great start. On the other hand, if you need a math’s degree to understand it, it’s probably not that effective.<\/span><\/p>\n

A very common complaint I receive from candidates is that the commission structure is hard to understand or it’s hard to obtain – i.e. When the hiring manager says, “we’ll only release it when we put forward an offer to you.”<\/span><\/p>\n

This is a big mistake because it puts up one extra barrier that isn’t necessary during the hiring process.<\/span><\/p>\n

In this market, it’s hard enough as it is finding top performers, so my advice is to make the commission structure accessible and easy to understand, with real-life examples of the top earners in the team and what they were paid recently.<\/span><\/p>\n

As a general rule, a new business acquisition role should have a 50\/50 split between base and comms, and that’s all well and good, but it’s also important to give candidates a roadmap on how they can get to that magic OTE.<\/span><\/p>\n

Here are six points I believe make a strong commission structure;<\/span><\/p>\n

1. Paid monthly or quarterly (monthly especially for high volume\/velocity sales)<\/strong><\/span>
\n2. Uncapped<\/strong><\/span>
\n3. An accelerator in place (big jump in the % paid) for achieving a set number well above target<\/strong><\/span>
\n4. 4. A reasonable threshold with a tapered % up to the strong accelerator<\/strong><\/span>
\n5. A clear and easy to understand policy on claw-backs<\/strong><\/span>
\n6. Not dependent on others’ performance<\/strong><\/span><\/p>\n

I find that discretionary plans often have the effect of de-motivating strong performers because (as per the definition) it’s up to an individual and is subjective. Therefore, it rarely ends well.<\/span><\/p>\n

In some cases, team commission structures can be a good idea but generally causes resentment when a top performer carries others within the team.<\/span><\/p>\n

 <\/p>\n

SEEKING INDUSTRY-LEADING TALENT?<\/h3>\n
Leverage Pulse Recruitment’s expertise in IT, sales, and marketing<\/a> to secure elite professionals in Sydney, Melbourne, Brisbane, the wider Asia-Pacific and United States regions. Experience the advantage by connecting with us<\/a>!<\/div>\n
<\/div>\n","protected":false},"excerpt":{"rendered":"

If a five-year-old can understand the commission structure, then that’s a great start. On the other hand, if you need a math’s degree to understand it, it’s probably not that effective. A very common complaint I receive from candidates is that the commission structure is hard to understand or it’s hard to obtain – i.e.…<\/p>\n","protected":false},"author":12,"featured_media":8095,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_seopress_robots_primary_cat":"none","footnotes":""},"categories":[75],"tags":[73],"class_list":["post-8094","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-employers-hub","tag-technology-sales"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.pulserecruitment.com.au\/af-api\/wp\/v2\/posts\/8094","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.pulserecruitment.com.au\/af-api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.pulserecruitment.com.au\/af-api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.pulserecruitment.com.au\/af-api\/wp\/v2\/users\/12"}],"replies":[{"embeddable":true,"href":"https:\/\/www.pulserecruitment.com.au\/af-api\/wp\/v2\/comments?post=8094"}],"version-history":[{"count":3,"href":"https:\/\/www.pulserecruitment.com.au\/af-api\/wp\/v2\/posts\/8094\/revisions"}],"predecessor-version":[{"id":14332,"href":"https:\/\/www.pulserecruitment.com.au\/af-api\/wp\/v2\/posts\/8094\/revisions\/14332"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.pulserecruitment.com.au\/af-api\/wp\/v2\/media\/8095"}],"wp:attachment":[{"href":"https:\/\/www.pulserecruitment.com.au\/af-api\/wp\/v2\/media?parent=8094"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.pulserecruitment.com.au\/af-api\/wp\/v2\/categories?post=8094"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.pulserecruitment.com.au\/af-api\/wp\/v2\/tags?post=8094"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}