A sales compensation plan is a structured approach that outlines how sales representatives are rewarded for their performance. It typically includes a mix of base salary and variable pay, such as commissions or bonuses, based on sales targets or achievements. This plan aims to motivate sales teams to reach their goals and drive revenue for the company. These plans can vary widely depending on the organization and its objectives. Factors like industry standards, company size, and sales strategy influence the design of a sales compensation plan. A well-structured plan aligns the interests of the sales team with the overall goals of the business, fostering a productive work environment.