.svg)
Glossary Terms
Compass - The Only Sales Glossary You Need
Compensation refers to the payment or remuneration provided to someone in exchange for their services, efforts, or losses. It can take various forms such as salary, wages, bonuses, benefits, or any other form of reward or recompense for work performed or damages incurred.
Compensation, in a broader sense, encompasses all the rewards and benefits that an individual receives in exchange for their work or services. It includes not only monetary payments like salary or bonuses but also non-monetary benefits such as insurance, retirement plans, vacation days, and other perks provided by the employer.
Workers' compensation is a form of insurance providing wage replacement and medical benefits to employees injured in the course of employment. It protects both the employee and the employer by providing financial support and coverage for medical expenses and lost wages resulting from work-related injuries or illnesses.
Deferred compensation is a portion of an employee's pay that is set aside to be distributed at a later date, typically upon meeting certain conditions such as completion of a specified period of employment or achieving certain performance targets.
It allows employees to defer receiving a portion of their compensation until a later time, often for tax or retirement planning purposes.
The compensation of a salary refers to the monetary payment or wages that an employee receives from their employer in exchange for the work they perform.
It constitutes the fixed amount of money paid to an employee on a regular basis, typically on a monthly or bi-weekly schedule, as agreed upon in the terms of employment. This salary may also be supplemented by additional benefits and perks provided by the employer.
Nonemployee compensation refers to payments made to independent contractors, freelancers, or other service providers who are not on a company’s payroll. This form of compensation typically includes fees, commissions, prizes, or awards for services performed and is reported on IRS Form 1099-NEC.
The different types of compensations are:
The key principle of any effective compensation are:
The best practices in sales compensation design are:
Compensation drives behavior. A well-structured sales compensation plan motivates teams to achieve targets, boosts productivity, and aligns individual efforts with organizational goals. It creates a performance-oriented culture, ensuring top talent stays engaged and rewarded. When aligned with strategic outcomes, compensation becomes a powerful lever to accelerate revenue growth.
The best practices in sales compensation design are:
Workers compensation works by providing employees with benefits if they suffer work-related injuries or illnesses. Employers pay into a state-regulated insurance system, and when a claim is filed, the employee receives coverage for medical care and partial wage replacement while they recover. In return, employees generally waive the right to sue their employer for negligence.
