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Compensation Plan Modeling
The design and analysis of compensation structures to incentivize and reward sales performance.
Implications
The process of designing and simulating different compensation structures to determine their impact on employee performance, costs, and company objectives.
Example
Example: A sales company uses compensation plan modeling to evaluate different commission structures, assessing how changes might affect sales behavior and overall profitability.
Related Terms
Different from salary benchmarking, which compares pay rates with industry standards, compensation plan modeling is about designing the structure of pay and incentives within the organization.
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