Sales Commission Plan: Tiered Rates

A Tiered Rate Sales Commission Plan

A sales commission plan is a document that outlines how a sales individual is compensated based on their sales performance. It is a way to motivate and reward salespeople for their impact on growing the business. When designing a commission plan, it is important to align it with your company's overall compensation philosophy and strategy. It is also important for a sales team to understand how their compensation works to to foster a high-performing sales team.

A tiered rate plan is where the commission rates vary based on different levels of quota or target attainment. As a sales individual achieves higher levels of goal attainment, their commission payout rates increase. For example, a tiered rate structure might look something like this:

What are the benefits of using this template?

• Easily explore Scenarios: Decipad's interactive interface allows salespeople to easily explore different scenarios and visualize the impact on their compensation. They can input varying sales figures, adjust quotas, or modify commission rates to see how different scenarios would affect their earnings.
• Dynamic, text-based formulas: Decipad utilizes dynamic and text-based formulas, simplifying complex calculations involved in building commission plans. And, with the tiers function, it’s fast and easy to calculate rate tiers and avoid errors.
• Enhanced transparency and trust: Interactivity and a narrative approach creates transparency with numbers, building trust between salespeople and the organization. Sales individuals can see how their compensation is calculated, understand the factors influencing their earnings, and have confidence in their commission structure.

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