What is incentive compensation?
Incentive compensation is the additional money employees make for a certain degree of success on top of their basic salary. Incentive compensation may depend on when a sales rep closes a deal. An agent can receive incentive compensation and a bonus.
Incentive compensation marketing is the procedure of monitoring and adjusting variable pay calculations and payouts to motivate the agents and increase productivity and efficiency.
Importance of incentive compensation
Teamwork can be strengthened with incentive compensation plans. The primary benefit of incentives is that they induce and encourage workers to be more effective and profitable. Aside from individual sales contests, executives or managers may organize team-based sales activities in which groups of salespeople collaborate to achieve a shared objective.
Many businesses use benefit programs, such as incentives and profit-sharing plans, to closely link employee benefits to work success. This allows workers to match their interests with those of the organization, while also rewarding and encouraging top performers to stay.
Finally, bonuses and incentives help to reduce agent turnover. A satisfied employee is more effective and has a positive effect on the rest of the office. When an employee is happy with their pay arrangement, the agent is more likely to remain with an organization.