Incentive plans are greatly useful for companies as it helps maintain a competitive work culture and boost the overall productivity of employees. However, with so many different types of incentive compensation systems, one must also focus on implementing the right combination of incentive plans for maximum efficiency. 

Incentives have a significant impact on the overall revenue generation in a firm. As companies pay employees above the base salary plan, it adds to the extra expenses. Another challenge is that it is difficult to estimate the total incentive value, and that prevents businesses from obtaining a firm grip on the expense flow. 

One of the most effective options is to implement commission incentive plans within the overall incentive structure. It not only helps businesses attain better control over the revenue flow but also improves sales and overall employee performance. 

What Is Sales Incentive Program?

commission incentive program is an employee variable compensation plan that incentivizes sales outcomes. So an employee under the sales incentive program receives an incentive payout for every successful sale or a total sale against defined target. Commission incentive programs can have various features that affect incentive payout calculations. For instance, an employee may receive an incentive for meeting a target threshold number of sales; additional incentives may be offered for sales of certain products, while some companies also provide additional performance multipliers based on total portfolio performance or company performance. Therefore, depending on the various bonuses and targets, companies calculate the sales incentives for employees. 

Compared to other incentive compensation systems, commission-based incentive programs have several benefits. Companies can streamline their incentive programs and extract maximum efficiency from the overall revenue flow. 

Here are some key benefits of having a commission incentive program in your employee compensation structure.  

Benefits Of Incentive-Based Employee Compensation

1) Improves productivity

Employees on a commission incentive plan feel more motivated towards the job. As employees get suitable incentive payouts for their sales activities, it encourages them to perform with dedication and loyalty over the long run. Commission incentive plans also encourage new recruits to turn productive faster. As the recruits observe the benefits of incentives, they focus on getting conversion rates up, and therefore, it boosts the overall employee productivity rates of a company. 

2) Sales Consistency

To achieve sales targets on a timely basis, a company must have a dedicated sales workforce that performs well throughout the year. On the other hand, employees need motivation and recognition to keep performing at their best in the long run. In both scenarios, a sales incentive plan suits the best. It keeps the sales reps motivated to perform better as they receive benefits for achieving sales targets. And as they perform better, the customers get a better sales experience. This directly boosts sales and also attracts new customers to the business due to the quality of service offered. 

3) Controls Expenses

Commission-based incentive plans are easier to calculate, and they offer more precise control over the company’s expenses. Depending on previous sales, one can estimate the current year’s sales to estimate overall expenses related to incentives. Similarly, commission-based incentive plans are based on sales, and a company generates more revenue while paying bonuses to the employees. Therefore, commission type incentive plans offer better control of the overall revenue flow of an organization. 

4) Encourages Team Work

Commission-based incentives boost overall morale and promote teamwork within the workforce. As sales reps transfer customers through different sales stages, reps perform as a team to end deals. The overall sales experience is improved as reps aim to receive maximum benefits through sales-based incentives.  

5) Talent Retention

One of the most beneficial features of sales-based incentives is talent retention. This type of incentive plan focuses on sales, and therefore, the top performers who bring in more sales get the most benefits from the incentive plan. This not only encourages them to perform better but also makes them more dedicated and loyal to the company. As employees are rewarded and recognized for their hard work, they tend to stay in the same firm for a long period. Therefore, with sales incentive programs, a company can experience a significant boost in talent retention. 

Which Incentive Plan Is The Best?

Companies use a wide range of incentive plans depending on various factors as follows-

  • Size Of Workforce,
  • Sales Goals,
  • Selling Process,
  • Budget Limitations,
  • Product Lifecycle,
  • Regional Challenges, etc

As you can see, several factors impact the incentive structure of a company. Therefore, the best option is to use the right blend of various incentive types to get the best results. 

Get Professional Help!

The best option is to get professional help to plan your incentive structure. With the professional service providers, you get instant access to expert knowledge and effective strategies. Professionals have highly experienced professionals with in-depth knowledge about various industries and suitable incentive structures. Therefore, partnering with professional service providers can help you save time and money while you get access to expert strategies and other benefits. 


Having reliable software for incentive calculations can greatly improve the overall efficacy of the incentive program. Professional software has several features that help in incentive planning and incentive calculation automation. So the managers can focus on other operations while time-consuming calculations are done automatically. With the new-age cloud platforms, a business can also make changes easily according to evolving business needs. The software provides simple controls to change incentive plans and conduct simulation tests to generate the perfect incentive combination for your company. 


Commission type incentive plan not only improves sales performance but also allows more control over the revenue flow of the organization. Further, a company can experience significant improvement in talent retention and overall customer experience. 

So get in touch with the professionals and strategize your incentive structure. Use reliable latest software for incentive calculation and planning, and you can make the most out of your incentive plans. Once these aspects are covered, you can expect significant improvement in revenue generation and sales.