Sales Incentive Plan Design Flashcards

Which pay mix ratio is most appropriate for a sales role with a long sales cycle, high complexity, and significant non-selling responsibilities?

Answer: 80/20 base-to-incentive

Roles with long cycles, complexity, and non-selling duties warrant a higher base (80/20) because the rep has less direct control over short-term results.

A 'kicker' in a sales incentive plan refers to:

Answer: An additional bonus paid for selling a specific high-priority product

A kicker is a special bonus designed to focus rep attention on a strategic product or behavior beyond the standard plan mechanics.

What is the primary risk of setting sales quotas too low across the sales force?

Answer: Underutilization of the incentive budget and inflated payouts

Quotas set too low cause most reps to exceed target, resulting in budget overruns and payouts that exceed planned incentive spend.

In a split-credit plan, when should equal credit be given to both the account manager and the overlay specialist?

Answer: When both roles contribute measurably to a single sale

Equal split credit is appropriate when both roles have defined, measurable contributions to winning the same opportunity.

Which term describes the percentage of the sales force expected to achieve quota in a well-designed plan?

Answer: Quota attainment distribution

Quota attainment distribution describes the expected spread of performance across the sales force, with ~60% at or above quota being a common benchmark.

A 'clawback' provision in a sales incentive plan is primarily used to:

Answer: Recover paid commissions when deals are cancelled or customers default

Clawbacks allow the company to recover commissions already paid when a sale is reversed, cancelled, or the customer fails to pay.

Which of the following best describes 'decelerators' in a sales incentive pay curve?

Answer: Reduced commission rates applied after a rep reaches a defined cap threshold

Decelerators lower the commission rate once a rep surpasses a certain performance level, often used to manage cost or prevent windfall gains.