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Sales Spiff vs Commission

Aug. 29, 2022

Performance Pay: Sales Spiff vs Commission

 

Sales spiffs and commissions are the two most popular forms of performance pay for salespeople. While they may seem similar, there are some key differences between the two that you should be aware of before implementing either one.

 

Spiffs are typically one-time bonuses paid out for achieving specific goals. For example, a company might offer a sales spiff for every 10 new customers acquired. Commission, on the other hand, is a percentage of sales made that is paid out on an ongoing basis.

 

There are a few key advantages of using spiffs over commissions. First, spiffs can be a great motivator for salespeople to achieve specific goals. They provide immediate feedback and recognition for a job well done. Second, spiffs are typically easier to administer than commissions. They don’t require ongoing tracking of sales figures and can be paid out in a lump sum.

 

 

However, there are also a few disadvantages to using spiffs. First, they can create an environment where short-term results are favored over long-term success. Second, if not properly structured, spiffs can encourage salespeople to engage in unethical behavior such as padding their expense reports or overstating their sales figures.

 

Commission plans can also have both advantages and disadvantages. On the plus side, commissions provide ongoing motivation for salespeople to sell more. They also usually result in higher total compensation for top performers. On the downside, commissions can be complex to administer and may create tension among sales team members if some are earning significantly more than others.

 

The best way to decide which type of performance pay is right for your company depends on your specific needs and goals. If you’re looking for immediate motivation and results, spiffs may be the way to go. If you want a more long-term plan that rewards top performers, commission may be a better fit.

 

Both spiffs and commissions can be effective tools for motivating salespeople. The key is to carefully consider your company’s needs and goals before implementing either one.

 

Benefits of Performance Pay:

 

1. Performance pay can be a great motivator for salespeople to achieve specific goals.

 

2. Performance pay is typically easier to administer than commissions.

 

3. Performance pay can provide immediate feedback and recognition for a job well done.

 

4. Performance pay can create an environment where short-term results are favored over long-term success.

 

5. Performance pay can encourage salespeople to engage in unethical behavior such as padding their expense reports or overstating their sales figures.

 

6. Performance pay can be complex to administer and may create tension among sales team members if some are earning significantly more than others.

 

7. Performance pay can be an effective tool for motivating salespeople.

 

8. The key is to carefully consider your company’s needs and goals before implementing performance pay.

 

9. Performance pay can be a great way to reward top performers.

 

10. Performance pay can be a motivating factor for salespeople to sell more.

 

Benefits of Spiffs:

 

1. Spiffs can be a great motivator for salespeople to achieve specific goals.

 

2. Spiffs provide immediate feedback and recognition for a job well done.

 

3. Spiffs are typically easier to administer than commissions.

 

4. Spiffs can encourage salespeople to engage in unethical behavior such as padding their expense reports or overstating their sales figures.

 

5. Spiffs can create an environment where short-term results are favored over long-term success.

 

6. Spiffs can be a great way to reward top performers.

 

7. Spiffs can be a motivating factor for salespeople to sell more.

 

8. The key is to carefully consider your company’s needs and goals before implementing spiffs.

 

Benefits of Commission Pay:

 

1. Commission pay can be a great motivator for salespeople to sell more.

 

2. Commission pay usually results in higher total compensation for top performers.

 

3. Commission pay provides ongoing motivation for salespeople to sell more.

 

4. Commission pay can be complex to administer and may create tension among sales team members if some are earning significantly more than others.

 

5. Commission pay can be an effective tool for motivating salespeople.

 

6. The key is to carefully consider your company’s needs and goals before implementing commission pay.

 

7. Commission pay can be a great way to reward top performers.

 

8. Commission pay can be a motivating factor for salespeople to sell more.

 

9. Commission pay can encourage salespeople to engage in unethical behavior such as padding their expense reports or overstating their sales figures.

 

10. Commission pay can create an environment where short-term results are favored over long-term success.