Coming soon · Book Profile
Compensating the Sales Force, 3rd Edition_ A Practical Guide to Designing Winning Sales Reward Programs
A practical, step-by-step guide to designing sales compensation plans that align seller behavior with company objectives by starting from sales job content and rewarding the point of persuasion.
A profile of this book is on the way.
What it’s about
Compensating the Sales Force, Third Edition, is the definitive practitioner's handbook for anyone accountable for how salespeople get paid. David Cichelli distills decades of consulting experience into a coherent system: sales compensation is a powerful management lever, but it only works when it flows from well-designed sales jobs and rewards sellers at the 'point of persuasion.' The book demystifies fundamentals (target total cash compensation, pay mix, leverage, performance measures, quotas, and performance ranges), lays out a full taxonomy of formula types (commission, bonus, linked designs, hybrids), shows how to construct and cost-model plans, and addresses hard cases—difficult-to-compensate jobs, complex and global sales organizations, small versus large companies. With sample policies, worksheets, a complete plan document, and a set of design principles, it equips general managers, sales executives, sales operations, HR, and finance leaders to build motivating, cost-disciplined, strategically aligned reward programs.
The through-line
- Who it’s for
- A sales, HR, finance, or operations leader responsible for how the sales force is paid, who wants a compensation program that reliably drives profitable revenue growth.
- The problem
- Sales compensation plans are confusing, noisy, and prone to over/underpayment, misalignment, and administrative burden. The reader feels uncertain about whether their plan works, worried it may be crippling performance or wasting money.
- The plan
- Start from sales job content and locate the point of persuasion.
- Set the core design elements: eligibility, TTCC, pay mix, leverage, measures, quotas, ranges, periods.
- Choose and construct the right formula type for the selling situation.
- Cost-model the plan and align supporting territory, quota, and crediting programs.
- Implement, communicate, administer, and assess the plan annually.
- The payoff
- Plans that reward sales excellence and drive profitable revenue growth. · Motivated, fairly paid sellers with clear line of sight from effort to reward. · Cost-disciplined, strategically aligned, well-governed compensation programs.
See our guide
Related profiles we’ve built
Additional reading
- Sales Compensation Surveys (Appendix B) · Various Third-Party Providers
The book recommends using external survey data to set competitive pay levels. Appendix B provides a list of survey sources for readers to conduct their own market research.
- Software Vendors—Sales Compensation Administration Software (Appendix C) · Various Third-Party Vendors
The book emphasizes the need for automation in administering complex plans. Appendix C lists vendors that provide these solutions for further investigation by the reader.
- Organization Design for Performance: A Step-By-Step Guide · Cedric Ng Mong Shen
This book is relevant because 'Design' is the second dimension of organizational effectiveness discussed in Step 1. It provides a deeper framework for structuring departments and companies, which directly impacts the sales function's effectiveness.
- Designing Salary Structures: A Step-By-Step Guide · Cedric Ng Mong Shen
Directly complements the main book by detailing how to create the base salary structures upon which the incentive portion of total cash compensation is built.
- Predictive HR Analytics: A Step-by-Step Guide · Cedric Ng Mong Shen
Relevant for more advanced practitioners who want to use data analysis (as mentioned in Step 9) to test hypotheses about plan effectiveness and predict which factors drive sales success.
- The Complete Guide to Sales Force Incentive Compensation · Andris A. Zoltners, Prabhakant Sinha, and Sally E. Lorimer
The book recommends this text as a comprehensive reference for readers who want more detail on specific approaches and analytics discussed in 'Sales Compensation Solutions'.
- The Future of Sales Compensation · Chad Albrecht and Steve Marley
The book points to this as a forward-looking resource to help readers think differently about how to design and implement sales compensation programs for the future.
- Driven: How Human Nature Shapes Our Choices · Paul R. Lawrence and Nitin Nohria
Referenced in Chapter 5 as providing a foundational framework on the four innate human drives (acquire, bond, learn, defend) that can be used to understand and segment sales force motivation.
- Designing a Sales Commission · Jerome A. Colletti & Mary S. Fiss
This book references it for the detailed mechanics of designing commission formulas (e.g., flat and tiered rates) that are used as examples for new product and new account incentives.
- Designing a Sales Bonus · Jerome A. Colletti & Mary S. Fiss
This book references it for the detailed mechanics of designing bonus formulas (e.g., step rates) that are used as examples for special incentive schemes.