"I think the most important thing to know is that there is no simple answer," says Paul Dorf, managing director of Compensation Resources, a Saddle River, N.J.-based firm that helps businesses tailor their compensation programs to meet their goals. "One of the major problems we have encountered is companies try to adopt something that worked somewhere else without understanding their own needs. You have to consider your business and marketing strategies."

"When we examined their contracts, they had no business contracts for anything more than 24 months," says Dorf. "When we examined the issue, we found the vice president of sales didn't think the reps should get commission on the sale after 24 months. So they didn't have any business over 24 months. It was a self-defeating policy."

"If you have sales reps all over the country selling to anybody they can, you are paying a salesman a salary of $75, 000 and they're stopping by at one business and selling $1, 000 worth of product, then driving several hundred miles and selling $50, 000 worth, maybe you need to restructure your plan. Have the salespeople concentrate on the $50, 000 accounts and maybe use telemarketing to try to sell the smaller ones."

"There are often too many bells and whistles," says Dorf. "If you want to make sure they sell as much as they can, service the old contracts, introduce new products and control costs, you end up with a plan that is far too complex to administer and understand. The assumption on the salesperson's part will be you are out to rip him or her off and the plan becomes non-motivational."

"Individually negotiated deals are ridiculous," says Dorf. "It overly complicates the programs. It results in sales programs not being very professional or well designed. The business owner does it out of emotion and it is not logical."

"The company needs to step back and ask themselves what they are trying to accomplish, and what's the best way to sell it. Is the best route using a sales force, telemarketing, mail pieces, advertising or combinations?"