Good morning,
Does your comp plan reward the behavior you actually want - or the behavior your reps figured out how to game?
Most compensation plans are too complicated to explain in three minutes and too easy to exploit in three months.
A 2023 report from Alexander Group found that 72% of sales leaders redesign their comp plan at least once every two years - yet rep retention and quota attainment barely move.
The plans are not the problem. What they reward is.
When comp plans reward volume over value, the wrong people win, and the right people leave.
FOR SELLERS | Your plan tells you what the company actually values - not what they say they value. If it rewards total revenue but management talks about margin, there is a gap you can use or get burned by. |
FOR MANAGERS | Your team does exactly what the plan incentivizes. If the wrong behavior is winning, look at the plan before you look at the people. |
FOR OWNERS | A comp plan is a strategy document. It signals what you are building, who you want to keep, and what kind of revenue you are chasing. Most owners treat it like a math problem. The best ones treat it like a culture decision. |
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NEW FEATURE: WEEKLY GAMIFIED QUIZ AND AI SALES ROLE PLAY PLATFORM THAT IS BASED ON THIS NEWSLETTER
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The revenue impact is direct. Rep turnover costs between 1.5x and 2x annual salary when you factor in recruiting, ramp time, and lost pipeline (Work Institute, 2023). Most turnover is not about base pay. It is about reps who cannot see a clear path from effort to income. A poorly designed comp plan is one of the fastest ways to lose the people who have options. |
This Week's Challenge
Pull out your current comp plan, find the accelerator schedule, and write down the three behaviors it rewards most - then check your pipeline or team activity against that list before the week is out.
Turn to Best View Tables Below
Key Terms
ACCELERATOR | A rate increase that kicks in after quota is hit. It rewards over-performance - but only works if quota is set right in the first place. |
DRAW | An advance against future commissions. Used in ramp periods - but recoverable draws that accumulate debt become a retention trap and should be used with caution. |
CLAWBACK | A provision that recovers paid commission if a deal cancels or a client churns within a set window. It protects margin, but a punitive clawback tells reps not to take risks. |
Do's and Don'ts
The difference between a plan that drives behavior and one that creates confusion comes down to a few key choices.
DO | DON'T |
Tie commission to the outcomes you actually want - margin, retention, new logos, category mix. Whatever drives the business. | Build a plan that requires a spreadsheet to understand. If a rep cannot calculate their own check in 60 seconds, the plan will not drive behavior. |
Set quota based on account potential and market data, not last year's number plus a percentage. Arbitrary quota is the fastest way to lose your best people. | Add components to solve political problems. Every new MBO or modifier added to keep someone quiet dilutes the signal the plan sends to everyone else. |
The Workshop
MODULE 01 - FOR SELLERS Read Your Own Plan Understand what your comp plan actually rewards so you can align your selling behavior to where the money is. |
Most sellers sign their comp plan, file it, and never look at it again. They run on habit and manager feedback instead of reading the actual incentive structure. That gap between what the plan rewards and what the rep prioritizes is where money gets left on the table. |
If someone asked you right now what single behavior your comp plan rewards most heavily, could you answer without looking it up? |
EXAMPLE A rep at a regional media company had been focused on total gross revenue all year. She was at 94% of quota in October and grinding. Her manager mentioned offhand that new logo acquisitions had a 1.5x multiplier that kicked in after 80% attainment. She had two new logos sitting in late-stage pipeline she had been deprioritizing because the deal sizes were smaller. She closed both in November. Her final payout was 18% higher than she expected. |
STEP 1 The mental model: your comp plan is a map, not fine print. Every component - base, commission rate, accelerators, bonuses, MBOs - is a signal about what the company wants you to prioritize. Sellers who read the map know where the multipliers are. Sellers who ignore it work harder for less. |
STEP 2 Applied to the example: the rep was not underperforming. She was performing against the wrong metric. Once she understood the new logo multiplier, she reordered her pipeline by incentive value, not deal size. Two deals already in motion changed her outcome. |
DO THIS TODAY Pull up your comp plan document today. Find the accelerator schedule and any bonus triggers. Write down the top three behaviors it rewards. Then check your pipeline against that list. SHARE IT Forward the comp plan section on accelerators to a colleague and ask them what they think it rewards. The gap between what people think the plan says and what it actually says is always instructive. Q: What is the single fastest way to increase your payout without adding a single new prospect? A: Read the accelerator in your current plan and find out if you are already in a position to trigger it. Most reps are closer than they realize. |
MODULE 02 - FOR MANAGERS The Plan Trains the Team Identify whether your current comp structure is driving the selling behavior you need - or the behavior that is easiest to reward. |
Managers spend enormous time coaching behavior - activity levels, call quality, pipeline discipline, close rates. But if the comp plan rewards something different from what you are coaching, you are fighting the incentive structure every day. The plan always wins. |
Think about the behavior that is most common on your team right now. Is it the behavior your comp plan rewards - or the behavior your coaching emphasizes? |
EXAMPLE A sales manager at a digital media company was frustrated that her reps kept chasing large one-time buys instead of building recurring programs. She coached renewals and long-term relationships constantly in her 1:1s. Her comp plan paid the same rate on a one-time $20,000 insertion order as on a $10,000 per month recurring program. The math was obvious to every rep on the team even if they never said it out loud. She redesigned the plan to pay 1.25x on recurring contracts. The behavior changed in the first quarter. |
STEP 1 The mental model: your comp plan is the loudest manager in the room. It does not get tired. It does not soften the message. It pays out or it does not. Before you coach behavior you want to see, check whether the plan agrees with you. If it does not, you are asking people to act against their own financial interest. |
STEP 2 Applied to the example: the manager was right about what the business needed. She was wrong about where to fix it. Coaching for renewals against a plan that paid equally for one-time orders was asking reps to work harder for no additional income. The fix was structural, not behavioral. |
DO THIS TODAY List the three behaviors you coach most often. Check whether your comp plan pays more for those behaviors than for the alternatives. Write down any gaps you find. SHARE IT Bring your list of comp gaps to your next 1:1 skip-level and frame it as a retention question, not a compensation complaint. Managers who present data on plan misalignment get action. Managers who complain get told to keep coaching. Q: What is the one comp plan change that would make your coaching conversations unnecessary - because the plan would be doing the work for you? A: Identify the highest-value behavior your business needs right now and confirm whether the commission structure pays a meaningfully higher rate for it. If it does not, that is your change. |
MODULE 03 - FOR OWNERS Design for the Business You Want Build a comp structure that makes the revenue you need to grow both achievable and affordable - without creating behaviors that work against the company. |
Most comp plans are built by reverse-engineering last year's payouts and adjusting for this year's targets. That approach assumes last year's behavior is the right behavior for this year's strategy. It usually is not. When you are trying to grow a different kind of revenue, you need a plan that rewards a different kind of selling. |
If you laid out your company's three-year revenue strategy next to your current comp plan, would the plan fund the strategy or work against it? |
EXAMPLE A regional media group was shifting from print-heavy to digital-first revenue. The comp plan still paid the same rate on print as on digital, with no differential for digital products that carried higher margin. The sales team kept selling what they knew because the plan made it equally profitable for them. The digital revenue numbers were not moving. A new plan that paid 1.5x on qualifying digital packages shifted the team's selling focus within two quarters. No new hires. No restructuring. Same team. Different plan. |
STEP 1 The mental model: a comp plan is a capital allocation decision. Every dollar of commission you pay is an investment in a behavior. Before you design the plan, design the revenue mix you want. Then work backward to the behaviors that produce it. The plan should make it financially irrational for a rep to ignore your strategic priorities. |
STEP 2 Applied to the example: the media group was not failing to execute on digital. They were paying equally for print and digital while asking reps to take the harder path. Comp differentials change the economic calculus. When digital became more lucrative, the team moved toward it. |
DO THIS TODAY Write down your top two revenue priorities for the next 12 months. Check your comp plan against each one. Identify whether the plan pays a meaningful premium for selling toward those priorities. SHARE IT Share your comp plan structure with your CFO or a trusted outside advisor and ask a simple question: does this plan fund the business strategy or the status quo? The conversation that follows is worth having. Q: What is one change to your current comp structure that would make your strategic revenue priorities the path of least resistance for your sales team? A: Add a rate differential for the revenue category you most need to grow. Even a 10 to 15 percent premium on qualifying sales signals to the team that the priority is real - and it costs you nothing until the behavior you want starts producing. |
Recommended Reading
The Complete Guide to Sales Force Incentive Compensation Andris A. Zoltners | 2006 | Amazon Books How to Design And Implement Plans That Work. |
Compensating the Sales Force David J. Cichelli | 2010 | McGraw-Hill The definitive reference for building sales compensation systems. Covers structure, mechanics, quota design, and how plan components interact when layered together. |
Revenue vs. Sales Mort Greenberg | 2025 | The Revenue Workshop The practical playbook for building revenue organizations that perform on purpose - not by accident. Comp design is one of the foundational levers covered. |
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