For Sales Personnel, Incentive Targets Lead to Bigger Bonuses

By Stephen Miller Oct 7, 2008
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In 2008, short-term cash compensation for sales personnel in the United States averaged 26.8 percent of salary for all salary levels combined, according to the 2008/2009 Survey Report on Sales Personnel Compensation, released at the end of September 2008 by Watson Wyatt Data Services.The report is based on responses from 848 organizations encompassing 5,547 locations and reporting data on 69,136 employees.

The average amount of short-term cash compensation payments made to sales personnel ranged from a high of 32.1 percent of salary to a low of 15.3 percent of salary.

The percentage of employees who received short-term cash incentives varied significantly among salary levels, ranging from a high of 68.2 percent of sales personnel earning $100,000 or more to a low of 42.6 percent for those earning less than $30,000.

Industry Sectors

There were significant differences in the average short-term cash compensation payments awarded among industry sectors:

    • Banking and finance sales personnel received the highest average short-term compensation payments, 43.3 percent of salary.

    • Insurance sales personnel received the lowest average short-term compensation payments, 16.9 percent of salary.

The average percentage of sales professionals who received short-term cash compensation varied significantly among industry sectors: 69.4 percent of sales personnel in durable goods manufacturing received a payment, while only 36.2 percent of sales professionals working in health care received a payment.

U.S. Regions

There were only modest differences with regard to short-term cash compensation payments among geographic regions. The highest average short-term cash compensation payment was 30 percent of salary, awarded to sales professionals in the Northeast. Sales professionals in the West Coast region received a slightly lower short-term cash payment of 24.9 percent of salary.

The percentage of sales personnel who received a short-term cash payment varied by just 1 percentage point across the five U.S. regions. The South Central region paid short-term cash to 61.7 percent of its sales professionals, while 60.7 percent of sales professionals in the Southeast received an award.

Bonus Awards

The amount of bonus awards varied somewhat between employees who had established sales incentive targets and those without established sales incentive targets.

    • Where sales incentive targets existed, average sales incentive payments paid as a percentage of salary were 18.5 percent.

    • Where no targets existed, average sales incentive payments paid as a percent of salary were 14 percent.

This was true to a much greater extent for the percentage of sales personnel who received a short-term cash payment:

    • Where sales incentive targets existed, 68.9 percent of sales professionals received a sales incentive payment.

    • Where no targets existed, only 36.6 percent of sales professionals received a sales incentive payment.

Stephen Miller is an online editor/manager for SHRM.

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