Compensation plan template

What is a compensation plan template?

A compensation plan template is a structured framework designed to help businesses clearly outline and manage the salary, incentives, and performance-based rewards for their employees.

This template helps define base salaries, incentive percentages, and key performance indicators (KPIs) that guide employee compensation, ensuring fairness and alignment with organizational goals.

With this template, you can quickly set up a comprehensive plan that tracks employee performance and calculates incentives based on predefined metrics.

Who is it for?

This compensation plan template is ideal for people managers and sales team leaders who want to streamline their compensation strategy and ensure transparency in pay structures.

It's particularly useful for those involved in employee performance management, such as RevOps and sales teams, where performance metrics directly influence compensation. Whether you’re a startup or an established company, this template will help you set clear expectations and reward your team based on measurable achievements.

How to use the template

Using this compensation plan template is simple and straightforward. Here's how you can make the most of it:

1. Team & roles: Start by listing all the employees who are covered by the plan, along with their role, level, base salary, incentive percentage, and start date. You’ll also want to identify their direct manager.
2. KPI targets & weights: Define the KPIs that will be used to assess performance. This could include metrics like forecast accuracy, CRM data quality, and sales cycle time. Each KPI should have a target value and an associated weighting, reflecting its importance to the overall compensation.
3. Performance input: Track employee performance against the KPIs each period. Input the percentage scores for each KPI to calculate how well employees are meeting their targets.
4. Calculations & incentives: Finally, use the weighted scores to determine the employee’s incentive for that period. Multiply their base salary by the incentive percentage, and adjust based on their performance. The result is their earned incentive.

Download your compensation plan template

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Compensation plan template

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