If you ask any sales rep what they care about most, you’ll likely hear one thing: compensation. Commission plans aren’t just about numbers—they’re about motivation, trust, and performance.
Yet far too many companies get them wrong.
Either the plans are too complicated, too unrealistic, or too disconnected from what actually drives good behavior. The result? Confused reps, missed quotas, and unnecessary churn.
We spoke to a range of sales leaders to find out what makes a commission plan actually work—for the company and the rep. Here's what we learned.
1. Simplicity Always Wins
The #1 mistake sales leaders make? Overengineering the plan. When comp plans are too complex, reps lose clarity—and motivation.
What works:
- Clear base + OTE structure
- One or two accelerators (max)
- Simple, measurable goals: revenue, meetings booked, renewals, etc.
What sales leaders say:
"If a rep can’t calculate their commission in under 30 seconds, the plan is broken." – VP of Sales, SaaS startup
Tip:
Use real-world examples when rolling out the plan. Show reps what happens when they hit 80%, 100%, or 120% of quota so there are no surprises.
2. Make OTE Realistic—And Attainable
On-target earnings (OTE) should be just that: achievable if a rep is performing well. Inflated OTEs that only 10% of reps ever reach don’t motivate—they discourage.
What works:
- 60–70% of reps consistently earning 80–100% of OTE
- Transparent historical data during hiring
- Tiered goals with achievable accelerators
What sales leaders say:
"We publish how many reps hit quota each quarter. It builds trust and accountability." – Director of Revenue, Mid-Market Tech Company
Tip:
If your reps aren’t hitting quota, it’s not always their fault. Revisit your territories, product-market fit, and quota methodology.
3. Align Incentives with Company Goals
The best comp plans don’t just reward revenue—they reward the right kind of revenue.
Whether you're prioritizing upsells, multi-year contracts, or new logos, make sure your plan encourages the behavior you actually want to see.
What works:
- Extra commission for strategic deal types (e.g., annual prepaids, expansion deals)
- Penalties or clawbacks for churn
- Bonuses tied to team-wide success (to build collaboration)
What sales leaders say:
"We stopped paying the same rate for month-to-month and annual deals. Now reps prioritize long-term value." – CRO, B2B SaaS
Tip:
Use quarterly SPIFFs (Sales Performance Incentive Funds) to nudge short-term behavior without changing the base plan.
4. Don't Cap Commission
Capping commissions may feel like cost control—but it kills motivation. Top performers thrive on stretch goals and the chance to exceed expectations.
What works:
- No commission cap
- Accelerators for exceeding quota (e.g., 10% base → 15% after 120%)
- Public leaderboards or spot bonuses for reps who break records
What sales leaders say:
"Our top AE made more than their VP last year—and I was thrilled. That’s how it should work." – CEO, Growth-Stage Startup
Tip:
Even if you can't afford huge payouts, build in non-monetary rewards for overperformance—like President’s Club, extra PTO, or visibility with leadership.
5. Review and Evolve Regularly
Sales environments shift. New products launch. Markets change. Great commission plans are not static—they’re reviewed often and adjusted as needed.
What works:
- Quarterly feedback loops from reps
- Data-driven reviews of quota attainment
- Pilot programs before company-wide rollouts
What sales leaders say:
"We change our plan once a year, but we test changes on one team first. Saves us from surprises." – VP of Sales Operations, Enterprise Tech
Tip:
Survey your team anonymously. Ask: Does the comp plan feel fair? Do you understand how it works? What would you change? Then actually act on the input.
Bonus: What Reps Hate About Bad Commission Plans
Want to make sure your plan fails? Here’s what salespeople consistently complain about:
- Unclear formulas
- Shadow quotas or hidden metrics
- Changing targets mid-quarter
- Delayed payouts
- Manager overrides or adjustments without explanation
Avoid these, and you're already ahead of half the companies out there.
Final Thought: Compensation Is Communication
A commission plan is more than a spreadsheet—it’s a signal. It tells your team what you value, what success looks like, and how much you’ll pay for it.
If your reps don’t trust the plan, they won’t trust the company. But when the plan is clear, fair, and aligned with business goals? That’s when motivation kicks in—and results follow.
Want to attract reps who care about performance-driven culture?
List your sales roles where top performers are actively looking: TheQuotaBoard.com
Because the best reps don’t just want a job. unsplaThey want a plan that works.