Sales Commission Payout Ratio Evaluation
Sales Commission Payout Ratio Evaluation
Date: [DATE]
Introduction: Welcome to [Your Company Name]'s sales commission payout ratio evaluation. This key process identifies the efficiency and effectiveness of our commission-based payment system.
Evaluation Overview: This evaluation will assess multiple aspects of our sales commission payout system, then compare them to industry standards. We aim to ensure maximum transparency, fairness, and profitability in our commission distribution.
Evaluation Criteria:
1. Commission Payout Ratio (CPR): This is the ratio of total commission paid to the total sales. A higher CPR often indicates higher commission expense, and may affect profitability.
2. Average Commission per Sale: This is the average commission paid per transaction. It's vital in understanding if our compensation is competitive.
3. Commission Payout Growth Rate: This assesses the growth rate of commission payouts over a certain period. It indicates if commission expense is increasing at a sustainable rate.
4. Profit Ratio after Commission: This is the ratio of profits left after commission payouts to total sales. It ensures commission payouts are not eating into profits excessively.
|
Criteria |
Description |
Employee's Result |
Industry Average |
Rating (1-5) |
|---|---|---|---|---|
|
Commission Payout Ratio (CPR) |
Ratio of total commission to total sales. |
4 |
5 |
3 |
|
Average Commission per Sale |
Average commission per transaction. |
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|
Commission Payout Growth Rate |
Growth rate of commission payouts over a certain period. |
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|
Profit Ratio after Commission |
Ratio of profits left after commission payouts to total sales. |
Rating Scale:
1- Very Poor: Significantly below industry average.
2- Poor: Below industry average.
3- Average: Similar to industry average.
4- Good: Above industry average.
5- Excellent: Significantly above industry average.
Additional comments and notes:
