Can you work with existing plans?

Of course. We will always look at existing plans and outlines, including materials generated by AI. As we all know, AI is still a developing technology and isn’t consistently reliable for sensitive business functions, like data processing and pay calculations. Regarding other existing plan documents, it’s very common for clients to come to us with something that is almost working, but not turning over the results they’d like. We are always happy to help, from ad hoc advice to full redesigns.

Is it better to use revenue or profit when calculating commissions?

Profit/Gross Profit/Gross Margin is always going to be a more effective metric for freight brokers. However, for many other industries, Revenue is an effective and sensible choice.

How much of a company’s profit is too much to put towards incentives?

An incentive budget above 45% of a company’s profit is too much.

What is the ideal salary as a percent of pay mix?

Depending on the level of control the employee has over their incentive metrics, 60-90% of the pay mix should be salary.

What’s wrong with using an increasing retroactive commission rate based on performance?

It incentivizes unethical behavior for those who are close to their next rung/rank
It incentivizes complacency for those in the middle of their rung
It punishes those who fall just short of their next rung

What’s wrong with paying 100% commission?

100% commission plans are a bad idea for a number of reasons, including:

They drive undesireable (and sometimes unethical) behavior from your employees during slow periods due to desperation.
They drive up the cost of compensation during busy periods (windfalls).
They encourage a cutthroat, every-man-for-himself culture instead of a collaborative one.

Don’t see the answer you were looking for? Send us a short message and we will help.