Sales compensation plans: Real-life horror stories
Raise your hand if you’ve ever encountered a bad situation with your compensation. If you work in sales, you probably have a story or two (or ten!). We asked the sales community what some of their less-than-ideal experiences were when it comes to sales compensation plans and commissions. Some of the stories were shocking, while others are far too common. All of them resonated. Some common themes we saw were:
- Lack of trust
- Lack of transparency
- Poorly designed sales compensation plans
- Being paid incorrectly on commissions
We know this is a sensitive topic, so all of the responses will remain anonymous. Let’s dive in!
Lack of trust
One salesperson didn’t get their new comp plan for the year until March. This didn’t happen just one time, but many times. “It really sucked for the sellers.”
After being told to trust the sales org, this rep experienced incorrect payout 60% of the time. Most of the time they’d get paid their next commissions without the previous being fixed.
This one’s a doozy. Someone was once told they were going to get a ~$4,000 cash bonus for killing it this quarter but instead, they got a Domino’s pizza… “Expensive pepperonis!”
Lack of transparency
After a number of suspicious months, one Senior Business Development Executive asked their accounting team for the information used to calculate commissions. The reply they got was, “We don’t give that information to salespeople.” They felt they had been lied to during their onboarding about the “transparency” in the commission process, especially since they were the #2 seller in the sales organization.
One Enterprise Account Executive experienced a lack of visibility or communication around being paid out on a large deal. They were paid 30 days late on it.
An entire sales organization of over 100 sales reps got their bonus “ACH debited” from their personal account after the company found a clerical error. The worst part? It was one week before Christmas! “The bottom line was that the lack of transparency is always a morale killer for a sales team.”
Poorly designed sales compensation plans
One manager talked about their experience with a comp plan that had decelerated commission percentages as sales increased. This led to the sales team selling against company interest. “Why bother to close that deal on the last day/week of the month/quarter. If you hold it until the calendar turns, you get paid more on it.”
Doing 110% of their number, only to find that the following year’s comp plan was doubled and the % of each deal halved.
One Account Executive said they org “always” had an excuse for the lack of sales compensation plans. And when they finally rolled it out, quotas had doubled.
Being paid incorrectly on commissions
One rep was told that they were not going to get paid what was on the compensation plan because they totally blew their quota out of the water, more than anyone could have imagined.
We hear about this one happening all the time… If this rep was not keeping track of their own attainment in Google Sheets, they would have missed out on a lot of money from being shorted on their paychecks. “Luckily, they were always happy to right the wrong.”
Unfortunately, these stories are real and happen in sales organizations all the time. A lot of them are reasons for why people seek out a tool like QuotaPath to help calculate and automate commissions. Thanks to everyone who submitted answers! If you have sales compensation plan horror stories, let us know! As we’re building features, we want to help solve your specific pain points, so we’d love to hear them.