# What is an appropriate pay policy mix?

## What is an appropriate pay policy mix?

Setting an appropriate pay mix for your sales compensation plan — the ratio of target total cash compensation that is attributed to base salary vs. target incentives — is a common pain point for growing companies aiming to maintain competitive sales compensation structures.

## How is pay policy mix calculated?

It’s easy to calculate pay mix. On-target commission divided by OTE equals the percentage of your pay tied to the commission. Base salary divided by OTE equals the percentage tied to base salary. For instance, if your on-target earnings are \$100,000 and your base pay is \$54,000, your pay mix is 54/46.

How does a 70/30 salary work explain?

A 70/30 pay mix allocates 70 percent of the target total compensation to base salary and 30 percent to target incentive. Pay mixes vary from 50/50 to 85/15. Use a more aggressive pay mix for “high influence” sales jobs and a less aggressive pay mix for “lower influence” sales jobs.

What are the components of a pay mix?

What is a Pay Mix Ratio? A pay mix ratio is the ratio of base salary to commission. A pax mix ratio of 60/40 pay mix means that 60% of an employee’s compensation consists of a base salary, and 40% consists of commission.

### What are the elements of pay mix?

The legal elements of compensation Legal profit-sharing, incentive schemes, employee savings plans, employee share ownership and stock options are so-called “legal” peripheral compensation elements.

### Why is pay Mix important?

Setting the appropriate pay mix is a key factor in the design of your sales compensation plan. Having the wrong pay mix can lead to losing top talent, not being able to attract top talent, or overpaying your talent.

What is the pay structure?

A pay structure can be defined as a collection of wage grades, bands or levels that link related jobs within a hierarchy or series.

What is employee mix?

1. ( Professions) a group of people employed by a company, individual, etc, for executive, clerical, sales work, etc.

#### What are the factors affecting pay mix?

These are demand and supply of labour, cost of living, society, labour unions, legislation, economy and compensation survey.

#### How do you design a pay structure?

☛ Steps to assign pay rates to pay grades (or each job) ☞ First, find the average pay for each pay grade, since each of the pay grades consists of several jobs. ☞ Next, plot the average pay rates for each pay grade. ☞ Then, fit a line, called salary or wage line, through the points just plotted.