The second target, the hard-to-achieve target -- is something that the salesperson can take pride in achieving. Attaining this target means more for the success and improvement it represents than for the payout that comes along with it. The third component is the Top Performer incentive. For some sales staff, this may not serve as significant motivation as they may not feel as though they are in contention. For those high-performing staff members, however, this award gives the opportunity for bragging rights -- fulfillment of the ego. This can be powerful motivator for sales people. This incentive will work for the strong sales people, so while the others may not push themselves to attain it, all of the best sales people will and in doing so they will drive the most new business.

For the company, the sales people's compensation should support overall corporate strategy. In this case, the sales team needs to be motivated to sell as much volume as possible at profitable prices. This compensation system motivates the sales people on an individual level, wherein bonuses are used to motivate all sales people. These bonuses will be valuable to the lower-level performers because they will be able to maintain attainable targets.

If...

The sales team is able to focus on not just beating the numbers, but beating themselves.
The final level involves a healthy internal competition. The higher-end sales staff are placed into competition with one another. These sales people drive most of our business, so this reward of a vacation serves as an extra motivator just for them. The company benefits from specific competition-based motivation among its best people. Furthermore, this competition costs very little. The vacation costs a few thousand dollars, but the additional sales from all of the sales people who attempt to win this award will more than make up the difference.

The company needs to sell as many cleaning supplies as possible. For this to happen, the sales people need to be motivated in a number of different ways. What this proposed compensation system allows for is individual motivation against generic targets, motivation against oneself and finally a competition pitting the best against one another in a non-mutually-destructive fashion.