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A Practical Approach to Sales Force Compensation Plan in a Small Business

Author

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  • Wei-Tzen Yang

    (Graduate Institute of Management Sciences, Tamkang University, Taiwan)

  • Chang-Min Kuo

    (Graduate Institute of Management Sciences, Tamkang University, Taiwan)

Abstract

Small business owners and marketing managers encounter the threat of higher turnover of their sales people as most of them do not realise the firms' limitations and are notfamiliar with the fundamentals of the practice or the theory of sales. In this situation, they tend to copy sales force compensation plans from each other. This paper presents a compensation plan that combines a base salary (including a quota) with some incentives (in the form of commissions or bonuses) and the firm's profits. The factors that affect the compensation plan are identified and the implications of changes in some of these factors are demonstrated with a case study to serve as a guide for small businesses while designing or rewriting sales force compensation plans.

Suggested Citation

  • Wei-Tzen Yang & Chang-Min Kuo, 1996. "A Practical Approach to Sales Force Compensation Plan in a Small Business," Journal of Entrepreneurship and Innovation in Emerging Economies, Entrepreneurship Development Institute of India, vol. 5(2), pages 209-222, September.
    • Handle: RePEc:sae:jouent:v:5:y:1996:i:2:p:209-222
    DOI: 10.1177/097135579600500204
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    Cited by:

    1. Matthews, Russell S. & Chalmers, Dominic M. & Fraser, Simon S., 2018. "The intersection of entrepreneurship and selling: An interdisciplinary review, framework, and future research agenda," Journal of Business Venturing, Elsevier, vol. 33(6), pages 691-719.

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