Companies often find it challenging to assign salary grades and salary administration rules to their commissioned sales reps. Compensation plans for sales reps are focused on variable incentives, targeted total cash compensation pay mixes, and different sales pay philosophies. Base salary can be a small component of the cash compensation package for sales reps, and they often view base salary as meaningless from a competitive market perspective.
As a result, we recommend that sales reps be exempt from the salary administration process and, therefore, they would not participate in any merit increases. Sales reps are total cash compensation driven and their earned commissions and other sales awards essentially become their merit pay.