Compensation and Incentive Structure

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What is the total percentage of the two portions of the mix in a compensation plan?

90 percent
100 percent (correct)
80 percent
75 percent

What is leverage in a compensation plan?

The amount of increased incentive opportunity (correct)
The minimum amount of incentive pay
The base salary
The target incentive pay

What is the purpose of using at least two survey sources for key jobs?

To compare data with the industry average
To reduce the cost of surveys
To ensure consistency in data
To ensure the competition is represented (correct)

What is the recommended approach for extracting data from sales compensation surveys?

Using discrete data points from each survey (C) Signup and view all the answers

What is the purpose of synchronizing survey data with economic data?

To account for events in the marketplace and economy (D) Signup and view all the answers

What is the purpose of verifying job matches with published descriptions?

To ensure accurate job matches (B) Signup and view all the answers

What do sales leaders consider when evaluating a current plan's effectiveness?

Draws, sales crediting, and splits (A) Signup and view all the answers

What is the primary reason companies want to determine sales compensation plan ROI?

To improve sales effectiveness (B) Signup and view all the answers

What is a major obstacle in assessing plan effectiveness?

Unclear expectations for sales compensation (C) Signup and view all the answers

How can an HR professional increase their value to the sales organization?

By sharing industry trends and practices with sales leaders (C) Signup and view all the answers

What percentage of respondents indicated that determining sales compensation plan ROI is a top priority?

86% (C) Signup and view all the answers

Why have companies shifted their outlook on sales compensation?

To improve overall sales effectiveness (C) Signup and view all the answers

What is the main difference between a job with an aggressive mix and a job with less aggressive mix?

The level of predictability of cash flow (D) Signup and view all the answers

What is the primary factor that determines the proportion of pay that is base and the proportion that is incentive pay?

The role of the seller in the purchase decision (C) Signup and view all the answers

What is the overall market average mix for sales positions according to industry surveys?

70/30 (B) Signup and view all the answers

What is the implication of a job with a 50/50 mix or less?

The seller has a low level of influence over the purchase decision (A) Signup and view all the answers

What factors should be considered when determining the right mix of base pay and at-risk or incentive pay?

Both market practice data and job- and sales process-related factors (A) Signup and view all the answers

What is the purpose of using the mix of base pay and incentive pay?

To reflect the degree of influence the sales professional has over the purchase decision (C) Signup and view all the answers