Sales Compensation Glossary

The A-Z guide for Finance, RevOps, and Sales teams to debunk sales commission terminologies.

Couldn’t find a term you’re looking for?
Add your query by filling out the form below and we promise we’ll get back to you. :)
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.

Sales Compensation Terms & Definitions

Use this collection of commonly used terminologies and definitions to learn more about sales commissions.

Clear All
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Split Sales Commission Agreement
By split sales commission agreements, all salespeople are compensated proportionally for their contributions. Commissions on split sales can be divided equally among contributors or customized for each payee.
s
Target Incentive Compensation
Target incentive compensation is the entire variable compensation that a sales representative obtains if she meets her target performance (i.e. she hits quota). Not included in the base wage. The addition of incentive compensation to the basic wage yields earnings on target. Also known as: target commission
t
Term
That is the length of time covered by the contract. Early termination of a contract incurs a cost or a penalty.
t
Territory
Territories are segments of prospects and accounts that are assigned to specific salespeople or teams to sell items. Each team is commissioned with responsibility for its assigned territory.
t
Threshold
The minimum level of performance required for a salesperson to get an incentive payment is known as the threshold.
t
Tiered commission
A weary commission refers to an offer's built-in milestones. To incentivize salespeople to sell more and earn more, a basic commission with its type and length is established, and then incrementally greater commissions are added on top.
t
Top performers
The Top Performers of a business are the sales representatives with the highest win rates and who contribute to the enhancement of sales development procedures.
t
Total Rewards
Total rewards also known as total compensation, encompass all facets of a recipient's income, such as long-term incentives, recognition, reward programs benefits, training, etc.
t
True up (aka Catch up)
True-up is a payment adjustment strategy used to equalize or reconcile disparities between two amounts. Adjustment is made at a predetermined true-up frequency. Typically, true-up adjustments are issued after all other payment computations have been finalized.
t
Uncapped commissions
Uncapped commissions are a type of compensation structure where there is no limit or cap on the amount of commission that an employee or salesperson can earn. This means that the amount of commission an employee earns is determined by the actual sales they generate, rather than being limited to a specific amount or percentage. While this can be an attractive incentive for employees who are motivated by financial rewards, it can also be risky for employers who may need to pay out large amounts of commission if an employee is highly successful.
Variable Pay
Variable Pay, often known as "pay-for-performance" or "at-risk" pay, is sales compensation based on the level of achievement or performance of the payee. When a payee performs marginally better than usual, his/her pay increases, and when a payee underperforms, his/her total income decreases.
Workflow
Workflows, according to Canidium, are automated business processes. Workflows within SPM/ICM can involve the onboarding of new sales representatives, acceptance of sales plans, resolution of disputes, etc. Workflows can be basic or complex based on the requirements of the business.
Sorry, we couldn't find what you're looking for.
Couldn’t find a term you’re looking for?
Add your query by filling out the form below and we promise we’ll get back to you. :)
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.