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Compensation Pricing strategies: fixed, incentive, cost plus, time and material

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1. Fix price Compensation Pricing Strategy
2. Incentive based Compensation Pricing Strategy
3. Cost Plus Compensation Pricing Strategy
4. Time & Material Compensation Pricing Strategy

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Solution Summary

The solution presents a good group of sources about where to find the exact information for the different methods of compensation. The narrative includes a personal explanation of one of the strategies.

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Hi. I can point you to some very good resources on the internet that describe these compensation strategies.

Take a look at this link,
http://www.sncba.org/pdf/Sales_Compensation_WP.pdf
This is a white paper titled "Effective Sales Compensation Strategies & Programs" by Robert J. Greene who is from Reward $ystems, Inc.

If you look at page 15, Exhibit 2 you will find a very good description for #1 - Fixed price (which is like a salary)

Exhibit 3 on the next page is all about #2 above, Incentive (or variable) compensation.

Exhibit 4 in the white paper extends this a bit combining fixed and variable strategies.

For #4, time and materials, this is what I use most in my own career. Basically I get paid for each hour I work and I need to report my time at the end of the week. Often, the employer will as for a report each week that details my accomplishments over the week. Some employers are more strict and want me to plan ahead (project what I plan to get done prior to the week) then report what I actually got done, the issues I encountered and other risks that I need to call to the ...

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