Compensation Plan Terminology

Differing terminology usage can cause confusion when discussing
compensation plans. For instance, your neighbor’s interpretation of
what the term “level” means may differ from yours. This difference
in meaning is typically the result of personal experience.

Your experience may have been with “company X” while your
neighbor’s was with “company Y”. Companies X and Y used the
term level to mean two different things. Since each of your experiences
is uniquely with those specific companies, an assumption is
made that usage of the term also applies to the other’s company.
While often times the same term may have the same meaning across
companies, in some instances it will not.

This area will provide you with the most common uses for a particular
term, but does not guarantee that all companies will use the term
the same way – only that most companies will use the term in the
fashion described here.

MLM companies are entitled to develop their own lexicon. In fact,
many intentionally do in order to brand themselves with a more
recognizable identity. If a term you were familiar with through your
dealings with company X does not match what is listed here, it does
not mean that the specialized vernacular you have encountered
is “wrong”. It simply means that many other companies use an
alternate definition.

In order for a definition to make the listing here as a common term,
it must have been used in the same fashion by the majority of the
companies we have worked with.

Basic Definitions of Compensation Plan types
contained within this Primer

Before drilling down into specialized definitions, it is important to
have a basic understanding of the different compensation plan types
contained within this resource.

The Compensation Plan Primer.
Are there more compensation plan types in the marketplace today
than those discussed in this book? Yes. From time to time, you will
encounter a novelty. Sometimes these novelty plans are nothing
more than one of the recognized plan types with a custom branded
name. Occasionally, you may encounter a new idea altogether,
however it is reasonable to state that the vast majority of what is in
the marketplace today is addressed within this primer.



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Let's get the industry cleaned up!


Sincerely,
Scott H Leonard