Issues & Best Practices Regarding Earnings Caps in Sales Compensation Plans
Implementing earnings caps into a sales compensation plan can be a highly contentious and often focal point for discontent with the plan. No feature of an incentive plan causes more resentment than a cap. In most cases, the application of caps is a result of perceived overpayments in the previous year or as a risk avoidance measure when there is the potential for large deals or significant over achievement on