The first time I did quota and commission planning I shared it with my team in a Monday morning meeting. One of the reps said innocuously, “When are you sending us our annual comp letters?”. I had no clue what they meant, but I nodded my head and told them to expect it any day.
I called a mentor of mine and asked what an annual comp letter was. They explained that as quota and commission was set each year, I should memorialize that in a formal letter or document to each member of the sales team.
Ah, duh. I should have asked if they could send me a sample, but I wasn’t quick enough on my feet. I whipped one up from scratch for each person, sent them out and received them back signed the next day. Pretty easy.
Someone recently asked me to share my sample annual sales compensation letter with them, so I popped it into Google Docs and made a quick template. You will notice that my approach to an annual sales comp letter is super simple, just two pages. I have seen (and worked with) documents on the opposite end of this spectrum—30+ pages full of legalese. That’s fine too.
My simple sample is what I prefer, but it’s in no way meant to be definitive, so I expect you will adapt and modify this in a way that makes sense for your organization. And consult with a lawyer also, to ensure you are complying with any applicable employment laws!
Hope this is helpful for you!