How to use it
- Enter the incentive a rep earns at exactly 100% of target, in any currency, for one period.
- Set the plan’s threshold, the payout at threshold, the accelerator above target and the cap.
- Add one row per measure with its weight and the rep’s attainment as a percentage of that measure’s target.
- Read the total payout and the measure-by-measure table, then check the payout curve for steps or cliffs you did not intend.
- Change one design choice at a time (a higher threshold, a lower cap) and compare what the same results would pay.
How the payout curve works
Most incentive plans turn attainment into payout through a curve with three parts. Below a threshold, nothing is paid. Between the threshold and target, payout climbs to 100%. Above target, an accelerator pays more per point until a cap. The calculator uses a straight line for each part, which is the simplest common design and the easiest for a rep to understand. Sales force researchers Andris Zoltners, Prabhakant Sinha and Sally Lorimer set out these building blocks in The Complete Guide to Sales Force Incentive Compensation (2006).
Each measure is paid on its own curve, so a rep who misses the threshold on one measure still earns on the others. That is a choice: some plans add a gate (no payout on any measure unless the main one reaches a level), which this calculator does not model. For how to choose the measures, set fair targets and keep the plan inside the compliance rules, read the sales incentive plan guide for pharma.
Limits of the method
- It is one rep and one period. To cost a whole plan, run it for the spread of results you expect across the team.
- It trusts the targets. A plan that pays well on easy targets is a targets problem, not a curve problem.
- It does not model gates, team pools, quarterly true-ups or clawbacks.
- It says nothing about whether a measure is allowed. Incentives in pharma must stay within the SFDA code and company policy; see the SFDA marketing compliance guide.
Frequently asked questions
How is a sales incentive payout calculated?
Each measure in the plan has a weight and a target. The rep's result on each measure is turned into a percentage of its target, the attainment. A payout curve turns attainment into a payout percentage, and the measure pays the target incentive times its weight times that payout percentage. The total is the sum of the measures.
What is a threshold in a sales incentive plan?
The threshold is the attainment below which a measure pays nothing. It stops the plan paying for results that are far from target. Set it too high and reps who fall behind early stop trying for the rest of the period; set it too low and the plan pays for very little.
What does an accelerator do?
An accelerator raises the payout rate above target, so each extra point of attainment pays more than one point of payout. It rewards over-performance, but it also raises the cost of the plan when targets are set too low, which is why most plans pair it with a cap.
Should a sales incentive plan have a cap?
A cap limits the most the plan can pay. It protects the budget against windfalls, such as a tender or a competitor's stock-out the rep did not create. The cost is that reps who reach the cap have no reason to keep selling in that period, so set it high enough that only exceptional results reach it.
How many measures should a rep's plan have?
Few. Each extra measure dilutes the weight of the others, and a rep who cannot remember the plan cannot steer by it. Keep only the measures that matter most, each worth enough of the incentive to change behaviour. Check the weights with the calculator: a measure worth a small share of the incentive rarely moves anything.
Managing a field team? The first-line pharma sales manager guide covers the rest of the job, and the rep call plan calculator checks whether each rep’s customer list fits the field days. Or join the community and tell us which calculator to build next.