When the sales team grows, it’s not just headcount.

New territories, teams, quotas, and more follow suit. And with that comes new comp plans and complexities. 

What starts as a manageable spreadsheet quickly becomes a sprawling web of manual calculations, error-filled audits, and wasted time between RevOps, Finance, and Sales to determine who is getting paid what and when. 

Payout cycle slowdowns follow, and, in the worst-case scenarios, a rep (or reps) receive incorrect commission checks. 

These inefficiencies not only slow down payout cycles, they erode trust across the organization.

Did you know: 75% of sales reps don’t trust are paid fairly (Report)

The natural question arises: How can companies scale their commission processes without scaling their operations team?

That’s exactly where sales commission software like QuotaPath comes in. 

Built to automate, streamline, and bring transparency to sales compensation, QuotaPath helps fast-growing companies eliminate manual pain points while maintaining lean ops. 

And the results speak for themselves: from saving hours of administrative time each month to improving rep motivation and payout accuracy, teams across industries, from SaaS to healthcare, have proven that you don’t need to add headcount to scale commissions.

Below, we’ll explore:

• The hidden costs of commissions and manual tracking
• Why scaling sales shouldn’t mean scaling ops
• And, how QuotaPath’s automation empowers teams to grow smarter, faster, and without compromise.

Calculating the True Cost of Sales Compensation: Key Metrics and Considerations

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The Hidden Costs of Manual Commission Tracking

First, let’s get into the costs of commissions you don’t typically come across until there’s an issue.

Manual commission tracking may seem like the path of least resistance (especially for lean teams), but unexpected costs can accumulate quickly.

Every month, RevOps, Finance, or Sales leaders spend hours toggling between spreadsheets, CRM exports, and comp plan documents to calculate who earned what. This time drain is rarely sustainable, especially as the organization grows and comp plans diversify.

But the real cost? Errors.

A single cell drag error can break the accuracy of the commission calculation, resulting in incorrect payouts. Then what happens? Your reps lose trust in how they’re paid, compromising the entire purpose of commissions: to motivate certain selling behaviors.

Take Keegan Otter, Warmly’s Head of Revenue, who used to run commissions manually.

“We had errors, multiple audits… When six sets of eyes still aren’t enough to prevent errors, you know it’s a problem,” said Keegan. 

So, in addition to financial and operational risks, you now have teams chipping away at rep morale and organizational credibility due to manual sales compensation management practices riddled with mistakes. 

When time and trust are both on the line, the cost of not automating becomes hard to ignore.

The Blind Spot in Spreadsheets: Total Commission Rate

Additionally, when commissions are managed manually, one critical metric is often overlooked: the total commission rate.

This figure represents the combined percentage of a deal’s revenue paid out to every team member who earns compensation, including SDRs, AEs, Marketing, Sales Leaders, and others. While each payout might seem reasonable on its own, spreadsheets make it nearly impossible to track the cumulative cost at the deal, segment, or company level.

And that’s a problem.

Without visibility into total commission rates, Finance leaders can’t accurately forecast commission expenses or evaluate whether compensation is aligned with margin. Worse, high payout overlap across roles can quietly eat into profits without anyone noticing.

Automated solutions like QuotaPath expose this hidden metric in real-time across teams, plans, and deals.

David Thai, Augury’s RevOps Team Lead, switched from spreadsheets to QuotaPath and immediately benefited from greater clarity into total costs.

“Now we have more lines of sight between budget forecasting, commission forecasting on a monthly and a yearly basis… QuotaPath helped unlock a lot of things that I think were gaps for us in the past,” said David. 

When you can see the full picture, you can make smarter decisions, whether it’s adjusting accelerators, capping overlaps, or aligning plans with strategic goals. 

Total commission rate should never be a guess. With QuotaPath, it doesn’t have to be.

Why Scaling Sales Shouldn’t Mean Scaling Ops

Keep in mind, visibility is only half the battle.

Even when leaders understand the full cost of commissions across every role and deal, managing those costs manually is another story entirely.

As headcount increases and compensation plans become more nuanced, spreadsheet-based workflows struggle to keep up under the pressure.

That’s why scaling your sales team shouldn’t automatically mean scaling your ops team. 

Yet that’s often the default when manual processes remain in place.

Instead of empowering existing ops leaders, outdated workflows bog them down, consuming time, increasing errors, and making audits a nightmare. What once worked for a five-person team becomes a high-risk bottleneck as the org scales.

That’s exactly what James Hall, EVP of Revenue at Gappify, experienced firsthand:

“I probably spent five or six hours a month personally doing [commission calculations]… not a great process for everybody,” said James.

With QuotaPath, leaders like James can reclaim their time and refocus on strategy, rather than spreadsheets.

Or Liza Dukhova at Rootly, who runs RevOps solo for a growing sales org:

“My time is a valuable resource. I’m a team of one… QuotaPath saves me hours of time,” said Liza.

A tool like QuotaPath allows lean teams to do more with less by replacing brittle manual work with reliable automation, so you can scale sales, not spreadsheets.

What Scalable Commission Automation Looks Like

So, what does scalable commission management actually look like in practice?

It starts with replacing spreadsheets and disconnected workflows with a platform designed to grow with you. One that integrates with your existing systems, and one that supports complexity without sacrificing usability.

The right commission automation solution will offer:

• CRM integrations (like Salesforce or HubSpot) to sync deal data automatically
• Real-time visibility for reps to track earnings, forecast commissions, and flag discrepancies
• Customizable compensation plans with built-in automation and logic to support diverse roles and structures
  

For teams navigating rapid growth or shifting go-to-market strategies, the ability to move fast without rebuilding your compensation infrastructure is game-changing.

“Once we made the decision to get off spreadsheets… the question was how to do it cost effectively,” said Thomas Egbert, Head of Finance at Prefect, who purchased QuotaPath in 2022.

When teams automate calculations, they unlock time, accuracy, and transparency at scale. 

That’s what sustainable growth looks like.

ROI Realized ROI with QuotaPath

Of course, don’t just take our word for it.

Our customers have achieved significant wins in terms of time saved and money saved.

• Hydrocorp: Paid for QuotaPath in one month by catching commission overpayment mistakes
• Warmly: Scaled from 3 to 35 reps, saving 5–8 hours/month and increasing trust
• Whistic: Reduced commission processing time by 90% for ~30 reps
• Augury: Cut quarterly processing from 45 days to 15 days

Start Early. Scale Smart. No Extra Headcount Required.

The best time to fix your commission process isn’t after it breaks. It’s before it costs you time, trust, and top performers.

“When is it time to introduce automation? Day one,” said Hona VP of Finance Jordan Rupp. “I’ve worked at other organizations where you keep putting that off and you keep thinking and telling yourself, like, ‘Hey, it’s not worth doing it yet.’ But I don’t think we ever really calculate how much time, effort, and also emotional drain it takes on an organization to run this through a manual process.”

As your team scales, QuotaPath ensures your compensation operations don’t have to.

By eliminating manual processes, teams free up hours each month to focus on higher-impact initiatives, such as go-to-market strategy, forecasting, and enablement.

QuotaPath is built for lean teams with big goals. 

Whether you’re preparing for scale or already in hypergrowth mode, it’s never too early (or too late) to build a commission process that works for you.

Ready to get started? Schedule a demo with our team today.

Sales comp isn’t just a sales issue… It’s a margin, forecasting, and behavior issue.

Most CFOs know how much they spend on commissions. 

However, the best CFOs understand why they spend it and whether that expenditure is actually driving the desired outcomes. Because the way we see it (and use it), sales compensation is a strategic lever to influence revenue efficiency, margin performance, and sales behavior.

Smart CFOs don’t treat comp as a black box or a cost center.

“The only thing worse than overpaying is having an overly generous incentive structure where the commissionable team is not actually seeing the incentives right in front of their noses,” said Thomas Egbert, Head of Finance at Prefect. 

Leading finance teams are rethinking comp beyond a payroll line item in favor of viewing it as a direct input into CAC, LTV, gross margin, and retention. Especially in a market where the cost of capital has shifted, the most astute CFOs are trading the “grow at all costs” mindset for compensation plans that reward efficient, profitable growth.

As Ryan Macia, CFO at Osana, said, “Growing at 20% profitably is better than 100% with burn. Investors want growth and efficiency now.”

The Challenge With Comp

Still, despite more finance leaders recognizing sales comp as a powerful tool, 30% of finance and RevOps leaders say their comp plans fail to motivate reps, according to our 2024 report.  

This is often due to a lack of clarity and visibility, resulting in a missed opportunity for strategic influence and predictability in planning. When plans are buried in spreadsheets or divorced from actual outcomes, companies not only lose confidence in forecasts they also lose control of margin and motivation.

This blog will explore the lesser-known truths of sales compensation through the lens of high-performing finance teams.

We’ll unpack:

• The hidden margin risks in bloated commission structures
• How behavioral economics and visibility influence rep performance
• The CFO’s role in aligning comp plans to strategic business metrics
• Why automation and data-backed planning are no longer optional
• And the common pitfalls experienced finance leaders still make

Whether you’re building a comp plan from scratch or scaling one across a 300-person team, this blog will give you the framework and financial lens you need to treat comp like the growth lever it is.

The Hidden Costs of Sales Compensation Most CFOs Miss

While more CFOs are waking up to the strategic potential of sales compensation, many still overlook how compensation structures silently erode profitability and predictability.

It’s not just about how much you’re paying, it’s where and why that spend accrues.

Take what we call the “35% Commission Rate Trap.” 

It happens when multiple roles, like BDRs, AEs, SEs, frontline managers, and directors, are all paid on a single deal. On paper, each rate looks reasonable. However, without deal-level visibility, these layered payouts can accumulate quickly, resulting in a margin bleed that most CFOs don’t detect until it’s too late.

“You blink and you’re paying five commission rates … 5%, 10%, 3%, 1%, and it turns out you’re paying a 35% commission rate across all these people. That’s a hidden cost of commissions,” said our VP of RevOps, Sales, and Marketing, Ryan Milligan. 

This lack of visibility makes it almost impossible to assess true deal profitability, especially in team-based or multi-stage sales processes. And without centralized reporting, you can’t identify these inefficiencies until they’ve already impacted your margin.

Behavioral Economics and Sales Comp: Incentives Are Only as Good as Their Visibility

If hidden costs eat at your margin, then hidden incentives quietly erode motivation.

Following the logic of behavioral economics, an incentive only works if the person on the receiving end understands it, believes it’s achievable, and can track their progress in real time. Unfortunately, many comp plans fail at that last one.

The stat we referenced above from our 2024 Sales Compensation Trends report (30% of finance and RevOps leaders say their comp plans fail to motivate reps) is largely tied to a lack of visibility. 

If sellers can’t see how their efforts connect to earnings, compensation ceases to influence behavior.

Genevieve Moss-Hawkins , who introduced QuotaPath at NeuroFlow, saw a positive change with her team shortly after.

“The sales team loves having the ability to see their pipeline, forecast potential commissions, and understand exactly how payouts are calculated and when they’ll receive them,” said Genevieve.

Genevieve’s experience is a perfect example of how visibility reduces admin burden and how reps engage with their goals. 

By giving sellers line of sight into their pipeline, forecasted earnings, and payout timing, NeuroFlow unlocked more accountability and energy without needing to touch the comp structure itself.

The CFO’s North Star: Aligning Sales Compensation to Strategic Metrics

Visibility motivates. But alignment is what drives real business outcomes.

Once reps understand how they’re paid, the next critical question for finance leaders becomes: “Are we rewarding the right outcomes?” That’s where many comp plans fall short, especially those still locked into a “new business only” mindset.

The most strategic CFOs take it further. They use sales compensation to steer the business toward healthier metrics. Ie: gross margin, CAC efficiency, customer retention, cash flow. 

“Growing at 20% profitably is better than 100% with burn,” said Ryan Macia. “Investors want growth and efficiency now.”

That’s the North Star for finance leaders today. Rewarding top-line growth and designing comp plans that optimize how that growth is achieved.

Results of Sales Compensation Report

Watch the webinar to uncover the biggest gaps in comp planning and commission management, and get expert guidance to align Finance, RevOps, and Sales Leadership for 2024 success.

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Turning Metrics Into Incentives

So what does alignment actually look like?

Here are some examples of strategic sales behaviors smart CFOs are incentivizing — and the business outcomes they support:

By shifting incentives to support these behaviors, even modestly, CFOs can significantly impact the quality of revenue, not just its quantity.

Design With the End Metric in Mind

Comp plans are often built with only the seller’s perspective in mind. But when finance leads the design, the question changes from “What will reps respond to?” to “What metrics do we need to move?”

That subtle shift makes a major difference. You start to:

• Pay more for the deals that deliver long-term value
• Avoid overpaying for revenue that hurts margins
• Design accelerators that reinforce retention, not just acquisition
  

This approach turns comp into a strategic engine.

And it’s not limited to AEs. These principles can apply to SDRs, CS teams, and even full-company variable pay when aligned to top-level goals.

The Operational Payoff: Automation, Forecasting & Audit-Readiness

Strategic alignment is powerful, but without automation, it’s hard to scale.

Once compensation plans are designed to influence the right outcomes, finance leaders face the next challenge: executing those plans accurately, repeatedly, and at scale. This is where automation becomes not just a convenience, but a necessity.

Take James Hall, EVP of Revenue at Gappify for example. As they scaled, the errors mounted up.

“I would sometimes make mistakes… There are multiple times I would go back to a rep and let them know they had actually been overpaid or underpaid,” said James. 

Manual comp processes buried in spreadsheets create friction at every level. They slow down payout cycles, increase the risk of error, block visibility, and make forecasting a painful, unreliable task. In a world where forecast accuracy and audit readiness are non-negotiables, that’s a risk most CFOs can’t afford.

That peace of mind comes from knowing comp calculations are correct, approvals are streamlined, and payment data flows directly into payroll and accounting systems, eliminating double entry, cutting time, and reducing audit exposure.

Now, James can trust automation to reduce those errors and more…

“One of the things that has been really valuable for Gappify since we implemented QuotaPath is not just the time savings for me, but the positive impact on motivation for our sales team,” said James. “They love being able to log in and see how they’re tracking and model out, ‘Hey, if I book X amount of dollars, how much can I earn this month or this quarter?’”

Forecasting: From Luxury to Table Stakes

Once automation is in place, forecasting becomes a built-in benefit. The best comp platforms allow finance to:

• Model plan changes before rollout
• Forecast payout liability by pipeline, role, or plan
• Track attainment and commission cost in real time
• Produce audit-ready reports across periods and entities

“I loved that you could model out the pipeline… I would consider it [forecasting] a requirement because it’s really powerful to look at forecasted deals,” said Thomas from Prefect, who implemented Quotapath 3+ years ago.

What Most CFOs Still Get Wrong

This is where we see Finance leaders make the biggest missteps when it comes to comp:

• Overly complex plans = underperformance: 78% of leaders say reps don’t understand their comp plans.
• Underestimating sales comp’s strategic weight: CFOs who view it purely as a cost center miss opportunities to influence margin, retention, and growth quality.
• Lack of real-time reporting: Chris Wasik (Honeycomb) notes the importance of seeing “how much we pay per dollar of revenue sold” — a critical metric many tools overlook.
  

What Smart CFOs Do Differently

So, to avoid these downfalls, focus on the following. 

The most forward-thinking CFOs don’t treat compensation as a static line item — they treat it as a strategic lever for growth. Rather than focusing solely on cost containment, they design comp plans to influence deal quality, drive desired sales behaviors, and improve overall business performance.

They obsess over visibility for finance and reps. When sellers understand exactly how they get paid, they’re more engaged, more motivated, and more likely to deliver consistent results. That’s why smart CFOs prioritize tools and processes that make earnings transparent and easy to model.

They also design comp plans with the end metric in mind. Whether the goal is to improve gross margin, increase multi-year deals, or incentivize upsells, top CFOs work backwards from the business outcome they want to achieve, then model plans to support that outcome.

Finally, they invest in automation early. Rather than waiting until the comp process becomes unmanageable, they implement systems that can scale with the business, reducing manual work, eliminating errors, and freeing up time for strategic finance.

Turn Sales Compensation into a Strategic Advantage

Join the ranks of CFOs using comp to drive better business outcomes. Talk to QuotaPath to learn how you can model, automate, and scale smarter compensation plans.

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The Financial Accounting Standards Board (FASB) issued a major update to income statement reporting: ASU 2024-03, Disaggregation of Income Statement Expenses (DISE) that you should know about.

This new standard requires public companies to provide a more detailed breakdown of their operating expenses, including compensation-related costs. Designed to improve transparency for investors and stakeholders, DISE represents one of the biggest shifts in financial reporting in over a decade.

The most significant impacts of DISE is the requirement to break down incentive compensation costs, including commissions and bonuses. These expenses have historically been buried within broader categories like SG&A, making them difficult to isolate, analyze, or forecast accurately. This lack of visibility has posed challenges not only for financial reporting but also for understanding how compensation strategies impact profitability and growth.

This is no small line item.

Incentive compensation can represent 30–60% of total compensation spend, according to EY’s 2024 Compensation Reporting Survey. As a result, the new disclosure requirements will greatly influence how finance teams track, report, and manage compensation going forward.

Adhere to Financial Standards

QuotaPath helps your organization stay GAAP-compliant with audit-ready financial reports. Using Ledger, you can capitalize commission expenses in accordance with ASC 340 and automate amortization to align with revenue recognition under ASC 606.

Learn More

What’s Changing Under FASB: Key Highlights

The new ASU 2024-03 (DISE) standard introduces several key disclosure requirements aimed at improving transparency in financial reporting. These updates require a more detailed view of how compensation and other operating expenses are categorized within the income statement.

• Disclosure of compensation costs by nature: Compensation costs that are reported based on the type of expense, such as base pay, commissions, and benefits, rather than grouped in a single line item.
• Tabular breakdowns by expense captions: These natural expense categories must be mapped to income statement line items like Cost of Goods Sold (COGS), Selling, General & Administrative (SG&A), and Research & Development (R&D).
• Mandatory disclosure of selling expenses and definitions: Requires that companies report the total amount spent on selling expenses and clearly define what’s included. For instance, commissions, sales team costs, or marketing-related expenses. on selling expenses, and clearly define what each of these items includes.

The standard applies to all public business entities (PBEs) for annual reporting periods beginning after December 15, 2026, and interim reports starting in 2027, with early adoption encouraged.

Who This Impacts

The new disclosure applies directly to public companies. However, late-stage, IPO-bound, and private equity–backed companies are also likely to be affected, as they prepare for public filings. Additionally, pre-IPO companies required to furnish financials under SEC regulations, such as Regulation S-X, will be impacted. A cautionary note: many private companies will be affected if acquired by a public company or if they are preparing for an IPO.

The Compliance Timeline

The new disclosure requirements take effect for annual reporting periods effective after December 15, 2026, with interim reports required starting in 2027.

While retrospective application is optional, companies should begin collecting data as early as 2025 to ensure they have sufficient historical information for comparative reporting. Waiting could create significant challenges when the rules become mandatory.

Preparing Your Org: 4 Practical Steps for Finance Leaders

Meeting the new disclosure requirements will require more than updating reports. Here are four useful steps to help prepare your organization.

Step 1: Evaluate Your Current Tracking Capabilities

Begin by assessing whether your current systems can accurately track and categorize compensation data. Do you break out commission costs by plan type? Can you distinguish between base, variable, equity, and benefits? EY’s survey found that 92% of companies currently lack adequate systems to track and report compensation at the required granularity.

Step 2: Implement a Centralized Compensation System

A unified compensation system is essential for meeting the new reporting requirements and reducing the risks of manual errors. Prioritize tools that offer automation and real-time data. This will make it easier to track, calculate, and report compensation costs accurately.

Equally important is ensuring that your compensation system integrates seamlessly with your ERP and CRM platforms, like Salesforce or HubSpot, for a unified data flow. Solutions like QuotaPath’s integration with Rippling provide end-to-end visibility, helping organizations connect compensation management with financial reporting, facilitating compliance, and operational efficiency.

Step 3: Improve Data Accuracy and Standardization

Accurate, consistent data is critical for meeting the demands of ASU 2024-03. Start by building audit trails, validation checks, and reporting templates now to ensure your compensation data is complete, consistent, and reliable.

Relying on manual processes significantly increases the risk of errors, incomplete or inaccurate disclosures, and potential audit failures. Implementing the right systems and controls early will help mitigate risks and facilitate a smoother transition to the new reporting standards.

Step 4: Align Compensation to Financial Metrics

The new reporting requirements offer an opportunity to go beyond compliance by creating visibility into how compensation impacts business performance. More accurate data enables the alignment of incentive structures with key financial metrics, such as Customer Acquisition Cost (CAC), Customer Lifetime Value (LTV), Net Revenue Retention (NRR), and Gross Revenue Retention (GRR).

Tying compensation to these metrics encourages behaviors that drive long-term value creation by reducing acquisition costs, increasing retention, and boosting customer revenue. This shift supports reporting accuracy and strengthens the connection between compensation strategy and sustainable growth.

Beyond Compliance: The Strategic Advantage

With the right systems in place, real-time compensation data enables more informed business decisions. It informs forecasting, headcount planning, and resource allocation, increasing confidence in financial projections.

For instance, Adobe integrated its compensation systems into a unified platform, resulting in a 60% improvement in forecast accuracy.

Greater visibility also enables Finance to partner with Sales in driving margin-focused growth. Access to accurate compensation data allows them to develop compensation strategies that improve profit margins rather than top-line revenue.

Common Pitfalls to Avoid

Next, let’s talk about challenges. Take a look at these common mistakes to avoid to ensure a smoother path to compliance.

• Waiting until 2026 to prepare: Starting late leaves little time to assess your current systems, clean your data, and implement the necessary process changes.
• Using spreadsheets and email for commission tracking: Manual processes increase the risk of calculation errors, missed payments, and inaccurate reporting. They also lack the audit trails and controls needed to meet the standard’s accuracy and transparency requirements.
• Failing to align sales activities to the right expense categories: Without clearly mapping how sales activities, like commissions and bonuses, flow into financial reporting categories like COGS or SG&A, companies risk misreporting and failing audits under ASU 2024-03.
• Not documenting definitions for selling expenses: The new standard requires each company to define what qualifies as a selling expense. Failing to document this leaves room for inconsistency over time and creates confusion for auditors, stakeholders, and internal teams.

Final Thoughts: A Moment for Proactive Finance Teams

Don’t wait to act.

Start gathering the right compensation data now. Evaluate existing processes to ensure your systems can support the level of visibility and auditability required by the new standard. Start a phased implementation approach in 2025. This can help reduce risk, spread out the workload, and allow time to refine processes before the rules become mandatory.

QuotaPath builds visibility, accuracy, and flexibility in compensation management. Schedule time with a team member to see how QuotaPath can streamline the process for ASU 2024-03 compliance.

If you’ve ever built or managed a SaaS sales comp plan, you know the stakes are high.

A well-structured plan can fuel growth, align GTM teams, and retain top talent.

But too often, compensation plans become bloated, confusing, or misaligned with what actually drives your business forward. At QuotaPath, we believe the best sales comp plans are simple, logical, and fair—and that they’re tailored to how your team sells and scaled as your business grows.

In this guide, we break down proven SaaS sales compensation models by sales motion and role, highlight when to use each, and share best practices to ensure your plans motivate performance and scale with clarity.

Whether you’re a startup drafting your first AE plan or a growth-stage company evolving toward PLG and NRR-based models, this blog offers actionable templates and guidance to get comp right.

Step 1: Understand What Makes a SaaS Compensation Plan Successful

Simplicity, Logic, and Fairness

First, there are three key attributes of an effective SaaS sales comp structure: simplicity, logic, and fairness.

Simplicity, in the context of sales compensation, refers to a plan that is easy to administer and for the sales team to understand and calculate. To accomplish this, we recommend using no more than three compensation components per plan. HubSpot’s sales compensation structure provides several examples of simplicity in a SaaS sales comp structure.

Logic ensures that the compensation plan accurately reflects the company’s goals and motivates the sales team to achieve them. To create a logical compensation plan, align your plans with business goals by rewarding behaviors that drive business objectives.

Fairness means considering factors like rep performance, role, contributions, territory, and market standards when building a sales compensation plan. Then ensure quotas and OTEs are realistic and attainable.

Use this checklist to evaluate if a current plan meets these principles:

• Simple: No more than three compensation components per plan
• Logical: Plan aligns with business goals and rewards behaviors that drive key business objectives
• Fair: Quotas and OTEs are realistic and attainable

Step 2: Choose the Right Plan Based on Your Sales Motion

Second, as you approach building your comp plans, the next step is selecting a B2B SaaS commission model according to how your team sells. Aligning incentives with desired outcomes is essential to motivating software sales teams and driving business success. 

Revenue-Based Plans

A revenue-based compensation plan is a SaaS sales comp structure where a salesperson’s earnings are tied to the revenue generated by their closed deals or sales activities. It aligns sales incentives with the company’s business objectives to motivate behaviors that drive goal achievement.

• Single Rate Commission: An easy-to-understand plan that pays the same rate on every deal. This is an excellent “first” Account Executive plan for a startup, or a company expanding into a new territory, or launching a new product or service.
• Multiple Rate Bonus: offers a higher bonus amount for quota attainment or meeting criteria such as closing a specified number of deals in the predetermined period. This plan is intended to motivate and reward Account Executives who navigate high seasonality and adjusted quotas throughout the year.
• Net Revenue Retention (NRR): A plan that incentivizes Account Managers at a scaled company to expand existing accounts through upselling or to increase product adoption in PLG models.
• Gross Revenue Retention: Incentivizes Account Managers to focus on customer retention when upsell and expansion opportunities are limited in early-stage businesses.

Commission + Bonus Models

These SaaS sales comp structure types include a mix of variable pay tied to individual sales performance, plus additional bonuses for achieving specific goals or milestones. This approach is excellent for motivating software sales teams to close deals while incentivizing reps to achieve broader company objectives. 

• Accelerators: Incentives paid for exceeding sales goals, designed to motivate sales reps to sell more products or services by offering a bonus or other reward for achieving specific milestones, like 100% quota attainment. Accelerators encourage overperformance and are commonly included in a SaaS sales comp structure.
• Milestone Bonus: A set amount paid when a rep meets pre-determined stipulations. The payment criteria for these bonuses are straightforward. Reps only earn the bonus when they meet or exceed the stipulated goal. Otherwise, they receive nothing. This can lead to sandbagging, so we recommend pairing a milestone bonus with a commission plan to minimize this issue.
• Cliff: The minimum sales level a rep must achieve before they qualify to earn commissions according to the sales incentive plan. Also known as a commission floor, this compensation plan element can effectively motivate salespeople to attain designated key performance metrics.

Remember that to really see success with your comp plan model, regardless of the structure you move forward with, you have to provide your reps with visibility into their plans and progress. Enabling reps to track their progress with an application like QuotaPath keeps them motivated.

According to Genevieve of NeuroFlow, “The sales team loves having the ability to see their pipeline, forecast potential commissions, and understand exactly how payouts are calculated and when they’ll receive them.”

Usage-Based or Activity-Based Plans

The following are examples of comp plans for product-led growth or hybrid motions. “Despite the fundamental differences between traditional and usage-based pricing models, the underlying principles of sales compensation remain consistent. Both models involve determining the optimal balance between base pay and variable compensation, aiming to motivate sales reps to drive revenue growth,” Graham Collins said.

• Usage-Based: Reward salespeople based on the volume or value of product or service their customers consume, naturally aligning with a product-led growth (PLG) motion. This B2B SaaS commission model encourages sales reps to focus on long-term customer success and expansion.
  
  “By correlating sales compensation directly to customer usage, companies can foster a customer-centric sales culture and drive sustainable revenue growth,” according to Graham Collins.
  
• Activity-Based: Rewards salespeople for completing specific sales activities, such as making calls, setting appointments, or sending proposals, and is designed to motivate sales reps to prioritize activities that lead to closed deals. Align sales incentives with user engagement, product adoption, and value realization instead of closed deals or upfront revenue with a PLG motion.
  
  Example: “Pay reps $100 for every product-qualified lead (PQL) converted.”
  

Step 3: Align Plans with Roles on Your Team

Next, you have to match the plans to the roles of your team.

Each sales role has distinct responsibilities and contributions in the sales process. Tailoring compensation to roles ensures incentives are relevant and effective for motivating software sales teams’ performance, driving desired behaviors, and achieving business goals. 

For New Business Reps (SDRs, BDRs)

Activity-based plans encourage new business reps to complete desired activities aligned with organizational goal achievement.

• Activity-based pay: Rewards salespeople for performing specific sales activities, such as demos booked, calls made, or new qualified opportunities created. For instance, a new business rep earns $50 per qualified meeting they schedule, plus $200 per sales qualified lead (SQL). This encourages reps to focus on prospects aligned with prospects who match buyer personas most likely to purchase your product or service.

• Activity Based + Closed Won Commission: Adding a closed/won commission encourages new business reps to engage with quality leads by rewarding them with a percentage of every opportunity they create that results in a purchase. For example, using the Qualified Opportunity Bonus + Close Won Commission plan a rep could earn $100 for each opportunity generated plus a 2% commission for each closed/won deal.

For Account Executives

Select a SaaS quota-based compensation plan designed to motivate account executives to prioritize deals that drive business goals and encourage overperformance.

• Commission with Accelerators: A tiered commission structure, commonly adopted by SaaS businesses, designed to reward overperformance by enabling reps to earn a higher percentage on sales closed once they hit quota.
• Commission with Accelerators and Decelerators: A three-tiered B2B SaaS commission model for organizations selling products that are unaffected by seasonal shifts in buyer behavior. This plan includes accelerators for motivating software sales teams to overperform, decelerators for demotivating poor performance by discouraging reps from closing less profitable deals.
• Commission with Multi-Year Accelerators: Incentivizes reps for exceeding quota and for selling multi-year contracts. For example, an account executive on this plan earns a 10% commission of 1-year deals they close, 15% of 2-year deals, and 20% of 3-year deals.

For Customer Success & Renewals

Customer success and account managers typically handle renewals and expansions. The SaaS sales comp structure you select for your team should align with your current goals and priorities.

• GRR-Based: This plan keeps account managers focused on customer retention. It is well suited for companies with consistent pricing and minimal upsell or expansion opportunities.
• NRR-based: An NRR-focused compensation plan makes most sense for scaled organizations or those with product-led growth (PLG) strategies. This model incentivizes account managers to grow their existing book of business rather than retaining every customer, and it is well-suited for organizations with product-led growth strategies or ones that are scaled.
• GRR and NRR: This SaaS sales comp structure encourages account managers to balance their attention between retention and upsells and expansion, often evenly splitting the variable components 50/50 between GRR and NRR. For instance, account managers might receive a 2% bonus on expansion revenue after their retention threshold is met.

Step 4: Build a Scalable, Transparent Comp Plan

Lastly, build a plan that can scale. Specifically, one that can scale without sacrificing clarity.

Here are a few best practices to help with your sales compensation planning. A scalable comp plan starts with simplicity and alignment to company goals. Keep plans short, clear, and easy to explain. As AJ Bruno, QuotaPath’s CEO, puts it: “Plans should be so simple that someone could explain it to you in about 15 seconds.”

Set realistic quotas, introduce plans before the new year, and ensure reps understand how and when they get paid.

These fundamentals connect teams across sales, RevOps, finance, and leadership. Transparency is just as critical. Clear commission rules and real-time visibility build trust, drive retention, and reduce confusion.

“The whole reason we bought a platform was because we’re scaling,” said David Taub, Senior Director of Revenue Operations at Hydrocorp. “As I see more things rolled out, there’s more functionality I can continue to put into QuotaPath… it just gives a singular place for everybody to go get compensation truth and transparency.”

Tools like QuotaPath, integrated with your CRM, help automate this process, eliminate errors, and ensure every rep can track earnings in real time.

Try Pre-Built Compensation Templates with QuotaPath

Not sure where to start? QuotaPath’s Compensation Plan Library offers dozens of pre-built SaaS compensation plans that match a variety of sales motions and roles. You can also create and customize plans quickly with our AI-Powered Plan Builder, helping you save time and reduce errors.

Want to see it in action? Book a demo with our team to explore how QuotaPath can streamline comp planning and improve payout transparency.

As companies prepare for the second half of the fiscal year, the topic of sales compensation planning becomes a pressing priority. QuotaPath recently hosted a webinar addressing this topic, featuring an experienced panel comprising representatives from Finance, RevOps, and Sales.

The result? A candid and tactical conversation about what signals it’s time to update your plan, how to manage change effectively, and what traps to avoid.

Full Webinar

Adjusting Sales Comp Plans for H2: What’s Worth Changing

Watch Recording

Meet the Panel

Hosted by Ryan Milligan, our VP of RevOps, Sales, and Marketing, the webinar brought together:

• Anne Pao, Founder & CEO, Ignite Consulting – a RevOps and fractional CRO expert with deep experience across comp plan design for companies of all sizes.
  
• Ryan Macia, CFO at Osano – a seasoned finance leader in B2B SaaS with prior tenure at QuotaPath.
  
• Jon Rydberg, Founder, Align Advisory Group – a GTM veteran and former CRO, with 16+ years across tech sales roles.
  

This trio represented the trifecta of stakeholders that every effective compensation planning committee needs: Finance, RevOps, and Sales.

“If you don’t have those three people talking, that’s advice piece number one,” said Ryan Milligan.

When to Adjust Your Comp Plan

According to Ryan Macia, Finance should start evaluating comp plans when there’s a misalignment between actual performance and plan expectations.

“The obvious signals are a widening gap between performance and your plan,” said Ryan Macia. “But to really get at comp issues, you need segmentation—win rates by product, channel, or geo. That’s how you start seeing if compensation is part of the problem.”

Once you’ve identified a gap, don’t dive into spreadsheets immediately. Anne Pao recommends a discovery process rooted in transparency and direct feedback.

“One of the first things I do is a ‘roadshow’ with the sales team to understand what they find confusing or demotivating. I also survey Finance, RevOps, and Sales. That data becomes the foundation of the redesign,” said Anne.

Avoiding Common Pitfalls

A major risk in comp plan changes? Operating in a silo.

The panel agreed this often leads to “black box” plans that reps don’t understand or trust.

“I’ve had reps not realize they made more on two-year deals—because the comp plan was written in ‘German.’ Once I made it clear, one rep sold a two-year deal the next week!” said Anne.

And Jon Rydberg highlighted how the problem might not be your comp plan at all:

“You have to ask—is this a rep problem, an enablement issue, or a quota problem? Don’t just assume it’s the plan. Look at activity, coaching, conversion rates, and even market fit,” said Jon.

How to Roll Out Changes

Once the need for change is clear, how you communicate and implement is critical.

“The head of sales should own the rollout, and managers should meet 1:1 with reps to walk through how they can hit 130% of quota,” said Jon. “Tie it to their income goals, and keep it simple.”

Macia emphasized the importance of aligning changes with business objectives, noting that many plans still fail to reward behaviors such as long-term value or gross revenue retention.

“Cash receipt comp plans might make sense if cash is your number one priority. But if you’re trying to incentivize growth, you need better levers—like clawbacks and accelerators that reps understand,” said Macia.

Final Thoughts

If you’re entering H2 with a sense that something isn’t working, you’re not alone.

This panel proved that most companies struggle with the same core issues:

• Misalignment between plan design and business metrics
• Complexity that creates confusion for reps
• Failure to coordinate across Finance, Sales, and RevOps
  

QuotaPath exists to solve these challenges with tools that bring clarity and automation to compensation planning. Whether you’re tweaking quotas, launching accelerators, or overhauling your plan entirely, keep your cross-functional team aligned and your reps informed.

“Comp should never be a mystery. If you want to drive behavior, show them how to win,” said Anne.

According to the 2024 Sales Compensation Plan Report, 78% of revenue leaders said their sales reps find it difficult to understand their compensation plans. Poorly designed or executed compensation plans can reduce motivation, delay payouts, and frustrate both administrators and representatives alike. The evolving complexity of hybrid sales models, tiered quotas, and non-linear deal cycles demands more adaptable solutions.

As companies scale, their compensation plans add complexities and greater challenges, including:

• Reps unsure where to focus their efforts
• Distrust between Finance and Sales.
• Ops struggles to adjust poor-performing plans
• 91% of organizations missed quota expectations
• 60% of reps take 3 to 6 months to understand their plan
• 39% of leaders admit their comp plans contradict business targets

While platforms like CaptivateIQ aim to modernize compensation management, they may not suit every company. According to reviews on G2 and Capterra and customers who came to QuotaPath after using CaptivateIQ, some users report challenges when comparing QuotaPath vs CaptivateIQ. These issues include steep learning curves, reliance on support for changes, and high implementation lift for smaller teams or fast-moving orgs when using CaptivateIQ. 

Why Teams Explore CaptivateIQ Alternatives

There are several common reasons why organizations begin evaluating CaptivateIQ alternatives. CaptivateIQ’s lengthy implementation time motivates businesses that need a faster time to value to consider other options. Similarly, teams that prefer self-service plan creation are frustrated by the constant need for support to build and manage comp plans in CaptivateIQ.

CaptivateIQ pricing, like its platform, is complex and adds up, according to some G2 reviewers. Teams that desire more flexible pricing or packaging pursue CaptivateIQ alternatives. Likewise, teams preferring simplicity often wish for improved usability and reporting for non-technical users, causing them to explore other sales commission software options.

In this blog, we’ll explore top CaptivateIQ alternatives, including QuotaPath vs Xactly, Spiff, Performio, and Everstage, breaking down their core features, benefits, and ideal fit so you can choose the right solution for your RevOps tech stack.

CaptivateIQ Alternatives and Competitors Summary

The following table offers an overview of top commission automation tools for teams exploring CaptivateIQ alternatives.

Price Comparison

Transparent pricing models that disclose implementation or support fees, minimum user floors, and a free trial simplify the selection process without creating additional work for buyers. CaptivateIQ pricing lacks transparency, like most sales commission software alternatives, with one exception: QuotaPath. Here’s where each of the CaptivateIQ alternatives stands.

Continue reading to learn more about each platform.

QuotaPath

Key features:

• AI-Powered Plan Builder
• Free Trial experience
• Only push integration to Rippling
• Performance Analytics & Reporting
• Award-Winning Support Access
• Native CRM & Payroll Integrations
• Fast Onboarding and Time to Value
• Automated Commission Calculations

Everstage

Key features: 

• Automated Commission Tracking
• Seamless CRM & Payroll Integrations
• Real-Time Rep Visibility
• Flexible Plan Customization
• Performance Analytics & Reporting

Xactly

Key features: 

• Automated Commission Calculations
• CRM Integrations
• Real-Time Rep Visibility
• Support Access
• Flexible Plan Customization

Spiff

Key features:

• Performance Analytics & Reporting
• Automated Commission Calculations
• Multi-Level Payout Approvals
• Flexible Plan Customization
• Real-Time Rep Visibility

Varicent

Key features: 

• Automated Commission Calculations
• Seamless CRM & Payroll Integrations
• Flexible Plan Customization
• Ease of Use
• Performance Analytics & Reporting

Final Thoughts

As you explore the CapitvateIQ alternatives to meet your commission automation needs, consider ease of use, support reliability, and pricing transparency. These factors simplify the selection process while boosting adoption and long-term value.

Schedule a demo to see how QuotaPath compares.

RevOps leaders are transforming Slack from a messaging app into a full-blown operating system…automating tasks, reducing tech bloat, accelerating approvals, and even tracking leads in real-time. 

And let’s be real, some leaders joke about “always being away” or fantasize about deleting the app altogether. (“Can we include ‘Don’t Use Slack’ as an option?” said Tyler Patrick in the RevOps Co-op Slack channel, while Alex Knechtl admitted, “Status is always set to ‘Away.’”) 

However, despite the sarcasm and the fact that these quotes originated from Slack threads in professional networking communities, these leaders depend on Slack more than they’d like to admit.

We spoke with RevOps leaders to learn some of the most unique and high-leverage ways they’re using Slack. 

Recommended Reading

How To Become A Strategic Revops Leader: An Interview With Katherine Zhang

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1. CRM-Powered Deal Alerts, Right Where You Work

Used by: Nearly every high-velocity sales org

Integrate your CRM with Slack to receive instant updates when:

• A new deal is created
• A stage changes
• A deal closes
  

Why it matters: These alerts keep sales, customer success, and finance teams in sync—no chasing down status updates.

2. KPI & Goal Tracking Channels

Popular among: Performance-driven RevOps leaders

Slack posts pull in data from Salesforce, HubSpot, Looker, or Tableau to track:

• Weekly meetings booked
• Pipeline vs. targets
• Sales velocity metrics
  

It’s common to see dedicated channels like #kpi-tracker or #weekly-performance with automated updates. This results in transparency, better-informed reps, and a subtle nudge of friendly competition.

3. Lead Routing Alerts

Example: Automatically notify reps about new inbound leads

Slack becomes a lightweight lead router by:

• Tagging reps in real time
• Including lead source, contact info, and qualifying details
• Triggering SLAs through emoji reactions
  

The best part? No rep ever says, “I didn’t see the lead.” (Well, unless they mute the channel, oop.)

4. Pipeline Hygiene Nudges

RevOps teams use Slack bots or CRM triggers to:

• Remind reps to update deal stages
• Flag stalled opportunities
• Surface missing next steps
  

No need to chase reps over email. Just let Slack do the automatic nudging.

5. Discount & Deal Exception Approvals

Use Slack as a lightweight deal desk:

• Reps request discounts via forms or threads
• Managers approve using emoji reactions or Slack forms
• Context from CRM is automatically included
  

It saves time and avoids approval bottlenecks in email chains.

6. Win-Loss Insights on the Fly

Post auto-summaries of:

• Gong snippets
• Deal attribution notes
• CRM context and call links
  

Sales, RevOps, and enablement teams can learn in real time. No need to schedule formal reviews.

7. Daily Executive Digest

Slack delivers:

• Pipeline summaries
• Forecast deltas
• Rep attainment
  

These Slack digests replace dashboards for many execs, who prefer to stay informed without logging into three platforms.

8. Cross-Team Collaboration Channels

Create structured channels like:

• #deal-desk
• #comp-plan-feedback
• #revops-requests
  

Add lightweight workflows or link requests to Asana or Jira tickets. It keeps things moving and prevents requests from slipping through the cracks.

9. Onboarding & Ramp Alerts

New reps trigger Slack alerts when:

• They book their first meeting
• Close their first deal
• Complete LMS certifications
  

It makes recognition visible and ensures managers stay looped in.

10. Revenue Fire Drills

Used by: Fast-moving GTM teams

Slack alerts are triggered by:

• Churn risk signals
• Inactivity (no emails/calls in 7+ days)
• Forecast slippage
  

Mahak Vedi, RevOps leader, shared how her team ties Slack into almost every ops workflow:

RevOps uses tools like Catalyst or Vitally to notify AEs, managers, and CS leaders before it’s too late.

Bonus: A Startup That Runs Everything Through Slack

• Create Asana tasks directly from Slack
• Inbound leads are piped into dedicated channels
• A partner sends Slack alerts when someone visits their page, including name, title, and LinkedIn
  

Slack Isn’t Just Chat for RevOps.

Slack might not be built for RevOps, but that hasn’t stopped RevOps teams from making it work for them.

From automation to insights to approvals, RevOps is transforming Slack into a true operations command center. So while the occasional Slack detox might be tempting, it turns out the most innovative GTM teams are leaning in, and getting more done because of it.

Looking for more ways to automate your sales and revenue operations?

Start with QuotaPath’s integrations to keep your CRM, compensation, and payroll aligned. 

We recognize you love your spreadsheets. And, you should! They’re ‘ole reliable. But when it comes to sales compensation management, you ever stop to think that perhaps manual commission tracking creates more problems than it solves?

Spreadsheets are time-consuming to manage, prone to human error, and nearly impossible to scale, especially if your reps are running their own shadow accounting operations to calculate commissions.

Without real-time visibility, reps are left guessing what they’ve earned and why, while sales leaders and finance teams struggle to forecast accurately or explain payouts.

A single error in a formula or data entry can result in overpayments, underpayments, and prolonged disputes.

No wonder 80% of companies have admitted to paying their reps wrong.

As compensation plans grow more complex, the risks multiply, leading to payroll delays, damage to trust, and a risk to revenue.

It’s no wonder the sales commission software market was valued at $1.3 billion in 2024, and is anticipated to grow to $3.4 billion by 2033, according to Verified Market Reports.

If you’re ready to streamline your commission tracking process with a digital solution, read on.

We’ll define sales incentive compensation management software and discuss its essential features. Plus, check out our buying checklist, implementation guidance, and ROI tracking information.

Defining Sales Incentive Compensation Management Software

Sales incentive compensation management software is a tool that facilitates the design, implementation, and management of commission plans. Replacing manual processes with automation and real-time visibility saves time, reduces errors, builds trust with reps, and supports scalable revenue growth. There are about five major sales incentive compensation management software players in the market, including QuotaPath.

Core Components

Incentive-based compensation software helps organizations manage all aspects of a sales incentive compensation plan. These platforms support plan creation, sales incentive calculation, real-time commission tracking, and payout scheduling, reducing the administrative burden while increasing accuracy and transparency.

Versus Traditional Compensation Systems

Many sales organizations still rely on traditional methods like spreadsheets to manage compensation, despite being error-prone and time-consuming, and lacking transparency. We’ve found that 70% of organizations continue to use spreadsheets over software, even as compensation plans become increasingly complex.

In fact, TechRadar shared that 90% of organizations are still using spreadsheets to manager their most vital business data.

But, as David Thai, Head of RevOps at Augury, shared, “We were navigating on spreadsheets. Not necessarily everyone on the variable compensation plans is an Excel expert. And so we really wanted something that was going to be intuitive and remove a lot of the manual pains we had from calculating the commissions.”

Essential Features That Businesses Need

Ready to follow in David’s steps? If the time is now, start by looking for these key features from sales incentive compensation management software providers as you decide which tools to add to your list.

Commission Automation

Perhaps this is self-evident, but commission automation is the most crucial feature of any sales incentive compensation management software. Instead of relying on manual data entry or formula-heavy spreadsheets, these tools automatically calculate commissions using real-time CRM or deal data. So, what systems does the commission tool integrate with (and how) will be very important. This ensures greater accuracy while saving finance and administrators hours per month.

As Taggart Befus, Revenue Operations Manager at Whistic, explains, “Previously, commission processing took five to seven hours per cycle for a team of about 30 commissionable employees. With QuotaPath, that time has been reduced to just 30 minutes.”

That’s a 90% reduction in processing time, freeing RevOps to focus on more strategic initiatives.

AI-Powered Customization of Comp Plans

Another point to consider is how easy (or difficult!) it is to load your unique comp plans into your provider.

For instance, QuotaPath’s upload-PDF-to-build feature allows teams to generate compensation plans directly from existing documents or natural language inputs. AI enables teams to translate legacy plans into digital drafts, organize components with drag-and-drop ease, and visualize complex structures like shared quotas or tiered commission thresholds in a few clicks.

However, some platforms require meticulous setup and mapping to their deal sources to get going. When evaluating, see if the software provider can show you over a live call the build out of your comp plan… or better yet, sign up for a free trial if they offer it and do it yourself 🙂

Whether creating an incentive plan from scratch, adjusting last year’s quotas, adding a milestone bonus, or building a net revenue retention incentive scheme for your sales team, AI supports fast, accurate updates that reflect your current strategy. This level of customization helps businesses easily deploy incentive-based compensation plans that align with evolving goals.

CRM and Payroll Integrations

Now, back to those native integrations with leading CRMs and payroll platforms like Salesforce, HubSpot, Rippling, and Xero.

These are essential to remove roadblocks that hinder incentive pay processing. These integrations with your sales tech stack ensure real-time deal data syncing, eliminating manual errors for improved accuracy and timely payroll processing.

Setting up these integrations is easy with QuotaPath’s guided wizard experience, which is even available with a free trial. Check out our Integrations Hub to find your data source platform.

Rep Dashboards and Real-Time Tracking

Dashboards and real-time tracking give reps visibility into where they stand in relation to their goals and where the next milestone is. This encourages them to keep pushing. In other words, visibility motivates performance. According to Psychology Today, tracking progress fuels success by making reps more aware, focused, and motivated.

Andre King, Director of Sales at Rootly, said, “Visibility into their earnings has changed what the reps are pushing for, and showing your reps how much more they can make on longer contracts changed how they sell.”

Available Support

Lastly, this is people’s money on the line. So you must have access to support when you have an incentive compensation question or issue.

If something goes wrong or needs urgent adjustment, you need reliable teams to help. Whether resolving a payout issue or making a last-minute plan update, having a support team available when you need them ensures your compensation process stays on track.

Pre-Purchase Checklist

With a shortlist of potential platforms, it’s important to go beyond features and assess how well each solution fits your organization’s long-term needs. This checklist will help you evaluate strategic alignment, flexibility, compliance, and scalability before making a final selection.

Define Your Compensation Objectives

It’s critical to clarify what you want your compensation strategy to achieve. Are you trying to drive new business, reward multi-year contracts, increase self-sourced deals, or boost renewals? Your sales incentive compensation plan should directly support your go-to-market objectives, so the platform you choose needs to be flexible enough to model and adapt to those goals.

Evaluate Customization And Scalability

As your team grows and your go-to-market strategy evolves, your compensation platform must be able to keep up. Buyers should ask themselves, “How flexible is the plan builder? Does it support quota changes, spiffs, accelerators in addition to any organizational changes the team is facing?” QuotaPath solves this with AI plus a component library, making it easy to build and update plans without starting from scratch.

When assessing scalability, buyers should ask themselves, “Will this platform scale 2x or 3x our rep headcount? How easily will it be to add or remove reps, change teams, or roll up plans? As David Taub, Senior Director of RevOps at Hydrocorp, said, “The whole reason we bought a platform was because we’re scaling… It just gives a singular place for everybody to go get compensation, truth, and transparency.”

Ensure Compliance And Payout Transparency

Compliance and payout transparency are among the most overlooked challenges in incentive-based compensation management. Spreadsheets offer no central place to store payout records, generate an audit trail, or provide deal-level earnings visibility. Consequently, reps only see a total number without knowing which deals they’re being paid on or when they’ll actually receive their commissions.

QuotaPath solves this by connecting earnings to payouts, giving full visibility into deal data, scheduled payouts, and approval workflows. The resulting audit trail, rep sign-offs, and ASC 606-ready reporting improve data integrity, reduce disputes, and ensure compliance.

Recommended Reading

The ROI of QuotaPath (with ROI calculator)

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Post-purchase Implementation

Even the best sales incentive platform won’t deliver results without thoughtful implementation. Leverage these tips for a successful rollout that drives adoption across your team and maximizes long-term value.

Set Up Rules And Test With A Small Group

After selecting your compensation platform, begin implementing and testing your commission rules with a small pilot group. This phased rollout allows you to validate plan logic, identify gaps or inconsistencies, and collect meaningful feedback. Real-time visibility lets your team spot discrepancies early, reducing payout errors when the platform is fully launched.

Train and Onboard Your Sales Team

According to our 2024 Sales Compensation Plan Report, it can take reps 3-6 months to understand their compensation plans. Understanding sales incentive compensation plans is crucial to driving desired behaviors, keeping reps motivated, and achieving business objectives. Otherwise, reps become demotivated and disengaged and don’t trust their plans.

Properly training and onboarding your sales team on your new sales incentive tool will shorten that learning curve. When reps know how to use the platform, it will shorten the time it takes for them to understand how they earn incentive compensation while increasing their motivation and performance.

Monitor Usage And Collect Ongoing Feedback

Monitor your team’s usage of your sales incentive compensation management software to identify additional training needs or underutilized features, and gauge how your team is using the new tool.

Gather ongoing feedback to ensure the sales incentive tool meets their needs. You can collect feedback through short surveys, 1:1s, internal chat platforms like Slack, or anonymous forms. You’ll gain insights like user experience, usability issues, and team satisfaction.

Tracking ROI

One of the clearest returns on investment for sales incentive compensation software is the time it saves. Nearly every QuotaPath customer highlights reduced time spent calculating and managing commissions as a key ROI metric. David Thai of Augury shared, “We went from 45 days down to about 15 days to complete quarterly commissions… It’s like 25 days saved per quarter.”

At Whistic, Taggart Befus noted, “Previously, it took five to seven hours per cycle. Now it takes just 30 minutes.” For many teams, that time translates directly into cost savings. As Keegan Otter, Head of Revenue at Warmly, said, “QuotaPath has saved us thousands of dollars each month… just by removing the time spent troubleshooting commissions.”

Track Rep Performance and Retention

A sales incentive tool helps reps understand their plan, motivating them to exceed 100% sales quota attainment. It also helps managers identify where to prioritize coaching to boost performance. Track rep performance, retention, and commission disputes to measure the ROI of a sales incentive compensation platform.

Track Payout Disputes and Resolution Closure Timelines

Monitor the time it takes to resolve payout disputes and close the books after each commission cycle. By reducing the back-and-forth after paychecks go out, you speed up resolution timelines, increase team confidence in the process, and keep payroll on track.

Measure Performance Impact on North Star Metric

Use a tool like QuotaPath to design compensation plans that align directly with your North Star metric, whether new revenue, multi-year deals, or net revenue retention. By tying performance tracking to your top business objective, you can measure how compensation drives outcomes that matter most.

Final Thoughts

Choosing and implementing the right sales incentive compensation management software can transform how your team plans, tracks, and pays commissions. From streamlining workflows to motivating reps and improving accuracy, the ROI is clear.

To learn how QuotaPath can help you modernize your comp strategy and streamline your commission process, schedule a chat with a team member.

At NeuroFlow, spreadsheets once ruled the commission process…not in a good way.

“Both the finance team and the salesperson were doing their own calculations in separate spreadsheets,” said Genevieve Moss-Hawkins, Systems Operations Manager at NeuroFlow. “We had to slowly come to a consensus together on what the payout would be. It was very much a manual process.”

As the health tech company grew, so did the complexity of its commission structures. 

With increasing enterprise deals and varying roles across the sales org, a scalable and transparent solution became essential.

That’s when the team turned to QuotaPath.

Why NeuroFlow Chose QuotaPath

Genevieve discovered QuotaPath through the Philadelphia startup network and quickly saw promise in its Salesforce integration and intuitive interface.

“We loved what we were seeing, and the price was reasonable for us,” she said.

The clincher? Flexibility and fast configuration.

“QuotaPath had all our Salesforce fields available to play with and could represent the complexity of our business,” Genevieve said. “There was no question on either the finance or sales side about the payout.”

After a quick onboarding (2-3 weeks), NeuroFlow transitioned from disjointed spreadsheets to a streamlined, unified commission process.

Efficiency, Accuracy, and Time Back

Since implementing QuotaPath, the time savings have been immediate and ongoing.

“The time I’m not in spreadsheets doing manual calculations is huge,” Genevieve said. “Now, I reconcile commissions quarterly, approve deals quickly, and schedule payouts efficiently.”

What used to take days now takes hours, and the finance team no longer has to act as the go-between for commission questions.

Rep Motivation Through Visibility

But it’s not just Genevieve who benefited from the implementation.

Reps, too, can now forecast their commissions, track payout timelines, and understand how their earnings are calculated.

“The sales team loves having the ability to see their pipeline, forecast potential commissions, and understand exactly when they’ll get paid,” said Genevieve. “QuotaPath keeps them motivated and eliminates the back-and-forth.”

From Feedback to Feature: The Power of Partnership

Additionally, throughout their 3-year relationship with QuotaPath, Genevieve has seen some of her team’s feedback go live in the product. 

For instance, Genevieve’s early feedback helped shape QuotaPath’s Draft Plans feature, allowing teams to simulate and test commission models without affecting the live environment.

“Really early on, we provided feedback about wanting to mock up a plan and run scenarios without using the production environment,” Genevieve shared. “QuotaPath built and released Draft Plans. We’ve used it for at least one year of commission planning.”

Trust in the Tech and the Team Behind It

Lastly, Genevive called out QuotaPath’s Support, describing it as a cornerstone of NeuroFlow’s success with QuotaPath.

“Anything we’ve encountered as a challenge, we’ve been able to voice and have addressed by the QuotaPath team,” Genevieve said.

That responsiveness has made QuotaPath not just a vendor, but a long-term partner.

Ready to evaluate QuotaPath?

See how QuotaPath can simplify your commission process through trusted automation, visibility, and comp plans that drive performance. Schedule a demo today.

Sales compensation planning is one of the most effective levers for driving aligned revenue growth.

However, many teams still rely on outdated or ad hoc plans, leading to confusion, misalignment, and rep churn. According to our research, 39% of companies report that their compensation plans don’t align with company goals.

A strong comp plan can be a competitive edge in attracting sales talent and supporting scaling sales incentives as the team grows. It also shapes behavior and supports performance that drives the achievement of organizational goals.

This guide outlines how businesses can design smart, scalable sales compensation plans to motivate reps and drive revenue growth.

REPORT

Solving the Biggest Sales Compensation Challenges

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Understanding Sales Compensation

Understanding compensation planning and its objectives will help you create a more effective sales compensation plan.

Sales compensation planning is the strategic process of designing, implementing, and evolving compensation plans to align sales activity with business growth goals. Comp plans serve two core functions: motivating seller behavior and controlling cost of sale.

A good sales comp plan can do more than pay reps: it can help founders and operators identify scalable, intentional selling motions. For example, a comp plan rewarding longer-term contracts or multi-product deals can directly support strategic goals around runway and sales compensation.

According to Sangram Vajre and Lindsay Cordell in HBR, “too many companies still oversimplify by assigning quotas and commissions based solely on what segment (enterprise, mid-market, SMB) a seller is pitching. This traditional approach results in overpaying some salespeople and underpaying others, without accounting for two key factors.”

These factors include which go-to-market (GTM) tactics you are using, and where your company is in its business evolution. They continued by stating, “most B2B companies should revisit sales compensation at least once a year no matter what.”

Using Equity vs Compensation Structures

As your business builds out its compensation strategy, it’s important to consider not only how much to pay but also how to pay. Balancing cash compensation and equity can help you stay competitive in the talent market while aligning incentives with both short—and long-term goals.

Equity-based compensation can be a strategic tool for startups and small businesses to attract top sales talent when cash flow is limited. Offering equity aligns sales reps’ interests with the company’s long-term success, fostering a sense of ownership and commitment.

Cash compensation provides immediate rewards and is often preferred by sales professionals prioritizing short-term earnings. Balancing equity and cash ensures competitiveness in the market while managing financial constraints. According to HubSpot, smaller companies (fewer than 10 employees) often offer equity stakes ranging from 0.5% to 1% to attract talent.

When to Offer Equity to Sales Reps

Early-stage startups may offer equity to compensate for lower salaries and to incentivize early employees to contribute to the company’s growth. Equity is particularly effective for roles that significantly impact the company’s trajectory, such as sales leaders or high-performing sales reps. The Follow Up suggests that sales reps at seed-stage startups might receive approximately 1-3% equity, while those at Series A stages receive smaller percentages.

Implementing vesting schedules, typically over four years with a one-year cliff, is crucial to ensuring long-term commitment. Holloway’s guide emphasizes the importance of structuring equity plans with clear vesting terms to align employee incentives with company goals.

Designing Your Business’s Sales Compensation Structure

Creating a strong compensation structure means choosing the right components for your business stage, team roles, and revenue model. Each element plays a key role in shaping rep behavior and driving performance, from base salary to commission rates to payout frequency.

Incentive Structures for Sales Teams

Not all commission structures are created equal—businesses must tailor plans to team roles, company stage, and growth goals. Clear, motivating incentives that are easy to understand and directly linked to outcomes that the business cares about are essential when creating incentive programs.

Account Executive (AE) Incentive Structures

Typically, quota-carrying roles responsible for closing new business, upsells, or renewals:

• Use tiered commission rates (e.g., 5% up to quota, 8% beyond quota) to reward overperformance
• Add accelerators for multi-year deals, multi-product sales, or self-sourced pipeline
• Include SPIFs for strategic initiatives (e.g., new product launches or new logo wins)
• AEs at early-stage companies may benefit from equity for sales to make up for leaner base pay

For compensation plan templates for account executives, check out our library: QuotaPath AE Comp Plan Templates.

SDR Incentive Structures 

Meanwhile, SDRs are most commonly compensated on meetings booked, qualified opportunities, or pipeline sourced

• Incentives can be tied to:
• Number of demos scheduled
• % of demos that convert to opportunities
• Total pipeline generated

You can also use a points-based system or flat bonus per qualified lead for clarity.
Consider monthly SPIFs for team contests or time-bound pushes. For instance, a SPIF like “book 10 demos by EOM” helps drive high activity volume while aligning SDRs with broader GTM success. These short-term incentives boost morale, create a sense of urgency, and reinforce key behaviors that support pipeline growth.

When used strategically, SPIFs complement your core compensation plan by giving teams focused, achievable goals contributing to larger revenue outcomes. For compensation plan templates for SDRs, check out our library: SDR Comp Plan Templates

Common Challenges in Sales Compensation

Below are some of the more common challenges. However, many small organizations and startups don’t have historical data from which to build new comp plans, leaving them with a lot of guesswork. That’s why starting with a simple basic plan to get started is necessary with the ability to adjust plans mid-year as you learn more about average sales price, sales cycle length, and closed/win ratios.  

Liz Christo suggests, “I’d pull back to a quarterly quota. This allows you to mimic building an annual plan but gives you the flexibility to set appropriate quotas as you see changes in your sales cycles. It also sets everyone up for success, knowing they aren’t signing on for a plan that is daunting and too far away.” 

Managing Compensation on a Tight Budget

To effectively manage compensation with a limited budget, offer performance-based incentives, then focus on non-monetary rewards, recognition, and desirable benefits. This approach can help maintain employee motivation and satisfaction without exceeding budget constraints. 

Aligning Incentives with Company Goals

Even well-structured incentive programs will fail if they aren’t aligned with business objectives. Start by clearly defining company goals and identifying sales rep behaviors that support these goals. Then, incentivize those behaviors to drive business objective achievement.

Preventing Sales Team Burnout

To prevent sales team burnout, focus on compensation transparency, clear paths to sales quotas, and a balance between rewards and recognition. Provide teams with an application, like QuotaPath, for visibility into progress toward compensation milestones that help prioritize deals that will push them over the mark. Consider providing flexible compensation options and mental health resources, and fostering a culture that values work-life balance. 

Scaling Sales Incentives as Your Business Grows

As your team and revenue goals evolve, your sales compensation plan should grow with them. Building in scalability from the start allows you to adapt quickly, align incentives with your sales strategy, and support sustainable performance across the entire sales organization. 

• Start simple, scale with structure: Avoid overengineering early on. Begin with a clear, easy-to-administer plan and layer in complexity as your team and revenue model evolve.
• Tie incentives to evolving GTM priorities: As your go-to-market motion shifts, ensure comp plans evolve to reinforce the right behaviors and outcomes.
• Adjust based on team maturity and data quality: More mature teams and better data allow for more nuanced plans and sales performance metrics.
• Introduce leadership or manager plans: Motivate leadership by aligning their incentives with coaching effectiveness, team attainment, and strategic execution.
• Incorporate team and multi-level quota rollups: Enable collaboration and accountability by tying manager and rep incentives to team targets.
• Create plan flexibility to accommodate different sales motions: Customize incentives for roles focused on new business, expansion, renewals, or channel sales.
• Monitor payout consistency and ROI: Regularly review how incentive spend aligns with performance outcomes to ensure the plan delivers value.
• Build equity refresh cycles for long-tenured sellers: Offer long-term incentives beyond the initial grant to keep top performers invested.
• Document everything: Outline plan mechanics, policies, and exceptions clearly in a centralized location to avoid confusion and misalignment.

Tech Stack for Sales Teams

The right tools help small businesses scale efficiently, improve visibility, and reduce manual errors. The tech stack should support both revenue generation and compensation transparency. 

For example, this list of key tech stack elements meets this criteria: 

• Customer Relationship Management (CRM) (HubSpot)
• Compensation Management (QuotaPath)
• Sales Engagement Tools (Outreach)
• Communication & Collaboration Tools (Slack)
• Reporting & Forecasting Tools (Anaplan)
• Payroll & HRIS Systems (Rippling)

Final Thoughts

Sales compensation planning is one of the most powerful levers for driving aligned revenue growth. However, many businesses rely on outdated, inconsistent approaches that create confusion, misalignment, and rep turnover. A well-designed commission structure garners employee motivation while reinforcing the behaviors that drive business objective achievement.

As your company grows, your compensation strategy must evolve alongside it. Building plans that scale, support your go-to-market goals, and attract top talent sets you up for long-term success.Work with QuotaPath on your sales compensation plans.

Schedule time with a team member today.

This guest post on becoming a strategic revops leader was written from our friend James Geyer, Co-founder of AccountAim.

Revenue Operations (RevOps) is one of the fastest-growing functions in B2B.

As companies seek more cross-functional alignment, consistent growth, and better customer experiences, RevOps is moving from a back-office support role to a top-line driver of business performance.

But not everyone fully understands RevOps yet. Many organizations still treat RevOps as a reactive function: a Salesforce admin, a report builder, a catch-all for GTM drudgery. And for many RevOps professionals, that limited perception makes it hard to grow. Even senior operators struggle to earn a seat at the leadership table, let alone shape strategy.

That’s what makes Katherine Zhang’s story so compelling.

Katherine spent her early career in strategy consulting before transitioning into sales and RevOps leadership roles at enterprise-scale companies, including EMC and Dell. She went on to become SVP of RevOps at Project44, where she built the function from the ground up, and now serves as CEO of OPEXEngine — proving just how far RevOps leaders can go when they’re positioned as strategic partners, not taskmasters.

Below, Katherine shares what it takes to build credibility, influence the go-to-market strategy, and evolve from an order-taker to an executive leader.

Recommended Reading

From Sales Rep to CRO: An interview with Cliff Simon

Go to Blog

Meet Katherine Zhang

Katherine Zhang is the CEO & GM of OPEXEngine by Bain & Company, the leading performance benchmarking solution for SaaS and software companies. Previously, she spent over a decade building and leading growth strategy and revenue operations teams to scale tech companies including Project44 and Relativity.

How to become a strategic RevOps leader: Q&A

First, how do you define RevOps?

I see RevOps as the alignment and coordination of go-to-market resources to enable the ideal customer journey. That means aligning on strategy (who we’re targeting and what experience we want to create), coordinating the right processes to deliver on that strategy, and executing in a way that consistently supports the customer throughout their journey.

And, what attracted you to RevOps and what keeps you in it?

I love building teams and solving complex problems. In RevOps, there’s always something new to fix whether it’s improving the forecast, refining handoffs, or rolling out new tools. I also enjoy the variety. In one day, I might go from reviewing the pipeline with marketing, to discussing compensation with finance, to meeting with IT about systems changes. That breadth keeps things interesting.

What’s the difference between reactive and strategic RevOps?

At the start, RevOps has to be reactive. There’s foundational work that just has to get done. But if you stay in that mode, you become an implementer, not a decision-maker. The shift to strategic happens when RevOps starts bringing ideas forward. Instead of waiting for someone to ask for a report, you’re saying, “Here’s a new insight and what I think we should do about it.” That’s when you earn trust and influence.

“Strategic RevOps means understanding not just what the data says, but what it means for the business.”

What does it take to become a trusted strategic partner?

Start by nailing the basics. You need a function that runs well and consistently. But trust doesn’t come from perfection. It comes from being transparent about what your data shows and what its limitations are. You don’t need perfect data to be credible. You need to understand the data deeply, explain where it might be incomplete, and still offer a confident recommendation.

How do you communicate the value of RevOps to leadership?

RevOps becomes the hub of commercial operations. The place people go to understand how go-to-market is functioning. Especially in larger orgs, where no one has full visibility, RevOps becomes the connective tissue. Yes, you’re building systems. But you’re building systems that translate strategy into coordinated execution and align the business around it.

For someone earlier in their RevOps career, how can they grow into a more strategic leader?

Two pieces of advice. First, know your strengths and the blind spots that come with them. I’m great at simplifying complex problems, but I know that can make me prone to missing details. So I make sure to bring subject matter experts into the conversation to close that gap. Second, observe the leaders around you. What behaviors earn respect? How do they influence a room? That kind of organizational awareness is just as important as technical skills.

What challenges emerge when building RevOps at scale?

At scale, you can’t rely on tribal knowledge anymore. Every exception starts to create ripple effects across the system. So you need to define clear processes and stick to them. That requires more than policy. It requires communication. I’ve seen huge success just by explaining why a new rule or change exists. When people understand the impact, they’re much more likely to adopt it.

What do you see as the biggest opportunity in RevOps tech today?

Two areas stand out. First is data. We’ve spent years building tools to collect and report on data. However, we now need tools that help us interpret it, spend less time extracting data, and more time acting on insights. Second is enablement. We need to meet the field where they are. Spreadsheets and email aren’t going to cut it. We need tech that embeds into their daily workflows, whether that’s Slack, CRM, or somewhere else.

Lastly, how do you approach getting up to speed on data in a new org?

Be curious. Whether you’re a junior team member or a senior leader, start by listening. Ask how processes came to be. Sit with subject matter experts. Don’t just learn what’s happening, learn why. That context will help you spot gaps and opportunities others might miss. Take a page out of the sales rep playbook and embrace discovery as a foundational RevOps skill.

********************

Thanks for the thoughtful Q&A, James and Katherine!

Want to be more strategic in your RevOps role? Start using your compensation plans to drive key selling behaviors that result in the best kinds of customers for your business. Provide your teams with visibility and alignment while automating commission tracking and payments.

To see how you can leverage QuotaPath to be more influential with your RevOps jobs-to-be-done, schedule time with our team here.

Sales compensation is more than just pay—it’s a strategic investment. In 2025, forward-thinking companies are designing comp plans not only to reward performance but to shape it. A well-built plan doesn’t just pay reps—it influences which deals they prioritize and how they sell.

The stakes are high: Misaligned or overly complex compensation plans remain one of the biggest culprits behind rep confusion, low morale, and missed business targets. According to recent reports, 39% of revenue leaders admit their plans don’t align with business goals, and most reps don’t fully understand how they’re paid​.

The modern comp plan needs to be transparent, data-driven, and adaptive. With evolving go-to-market strategies, multiple sales roles, and dynamic revenue models, building a plan in 2025 means planning for agility and clarity from day one.

Comp plans are performance drivers—not just post-sale math. When sellers can forecast earnings based on pipeline and understand their plan structure in real time, they’re more likely to focus on deals that move the needle. For instance, by prioritizing multi-year, multi-product, or high-margin opportunities).

This guide will break down the essentials.

From understanding the role of compensation in motivation, to modeling, launching, and tracking your plan—this article will walk through the components and steps you need to confidently build and manage a comp plan in 2025.

Understanding Sales Compensation Plans

Before you start building your plan, it’s important to understand sales compensation and why it matters for rep motivation and company growth. 

A sales compensation plan is a structured framework that outlines how sales reps are paid based on their performance. It is designed to motivate salespeople to generate revenue and achieve sales goals, thereby driving organizational objectives. 

The typical core components of a compensation plan include:

Base salary: a fixed amount of money that an employee is paid on a set schedule, regardless of their performance.

Variable pay: a type of compensation linked to an employee’s performance or outcomes, typically offered in addition to the base salary.

Commission structure: a set of rules that define what reps get paid for as well as when and how they get paid for their sales results.

Incentive programs: monetary and non-monetary rewards and recognition given to sales reps when they hit or exceed their sales targets.

Sales compensation plans are key sales team motivational tools to drive organizational objective achievement. It helps to understand why this is true before you build a sales compensation plan for your business.

Importance in Motivating Sales Teams

Sales compensation is a strategic lever for aligning individual motivation with company success. When thoughtfully designed, comp plans create more than just financial rewards. They provide reps with a clear sense of purpose and direction that links their success to the company’s growth.

Aligning incentives with business goals ensures sales teams focus on outcomes that matter. For example, if expanding in a specific region is a top priority, linking earnings to performance in that territory guides reps to concentrate their efforts there. This alignment improves motivation, sharpens decision-making, and ensures resources are applied where they’ll have the most impact.

Well-aligned plans also encourage greater collaboration across teams. For instance, shared performance targets between marketing, sales, and customer success create a more coordinated, efficient go-to-market strategy where everyone pulls in the same direction. This highlights how comp plans are your most important lever to drive specific selling behaviors.

Key Components of an Effective Plan

Every effective compensation plan is built from core components that work together to drive performance, ensure fairness, and align with business goals.

Steps to Build a Sales Compensation Plan

Following these best practices will help you create an effective sales compensation plan.

Define clear sales objectives

Defining clear sales objectives creates a foundation for a compensation plan that drives the right behaviors. When reps understand the outcomes they’re working toward, they’re more likely to stay focused, motivated, and aligned with company goals. Without this clarity, even a well-designed comp plan can miss the mark, rewarding activity that doesn’t contribute to organizational goal attainment.

Common sales objectives include:

Revenue targets set expectations for top-line growth and help shape quotas, accelerators, and thresholds.

Customer acquisition goals focus on bringing in new business and reward reps for landing first-time deals.

Upselling and cross-selling KPIs motivate maximizing value from existing accounts, encouraging reps to expand customer relationships over time.

By anchoring your plan to these objectives, you ensure that compensation is tied to meaningful progress.

Segment your sales roles

Segmenting your sales roles ensures that each team member is incentivized based on the outcomes they directly influence. This step is key to creating fair, effective plans that motivate the right behaviors across the organization.

Start by designing role-specific compensation that reflects each role’s responsibilities and impact. For example, account executive vs SDR pay models prioritize different activities. While AEs are rewarded for closed-won deals, SDRs may be rewarded for meetings booked or qualified opportunities.

Compensation by sales region or product is another type of segmentation. In this case, pay structures are adjusted to account for territory complexity, market maturity, or differences in deal size. Tailoring compensation to each role segment helps drive performance more effectively than a one-size-fits-all model and supports long-term rep satisfaction and retention.

Choose the right compensation components

Achieve the right mix of compensation components by selecting elements that reflect your sales strategy, drive desired behaviors, and offer enough upside to keep top performers motivated. Which components you choose will be different for a startup with a small sales team than an enterprise business with a large team.

A single rate commission is the simplest approach, offering a flat percentage for each deal closed. It’s easy to understand and works well for a shorter sales cycle or transactional sales. However, a tiered commission structure increases the commission rate as reps hit higher performance levels, encouraging overachievement by rewarding sustained success and boosting sales team motivation.

Encourage consistent sales performance by adding accelerators and decelerators to your mix of sales incentives. Accelerators boost commissions for exceeding quota, and decelerators reduce incentives when reps fall short.  By carefully selecting and combining these components, you can build a plan that balances clarity, fairness, and sales team motivation.

Set performance metrics and quotas

Sales quotas and performance metrics clearly define what is expected of reps, provide them with targets to pursue, help track progress, and motivate behaviors that support business objective achievement. These benchmarks also help management evaluate success, identify improvement areas, and refine compensation plans.

Today’s market requires different sales KPIs than in previous years. Historically, conversion rate, pipeline coverage, or win rate were sufficient. However, customer acquisition cost (CAC), lifetime value (LTV), gross revenue retention (GRR), and quota attainment rates should also be tracked to ensure sustainable growth while minimizing risks. Recurring revenue businesses also track MRR/ARR targets that align closely with long-term growth.

Following quota-setting best practices helps ensure quotas are a balance of challenging and achievable, keeping reps motivated. These practices include aligning sales quotes with business objectives, basing them on historical data, factoring in territory potential, and leveraging industry benchmarks help set you up for success.

Ensure plan compliance and transparency

Compliance and transparency are essential to building trust, increasing plan adoption, and boosting sales team motivation. When reps understand how they’re paid and have visibility into the calculations behind each payout, disputes are reduced, morale is boosted, and time is saved for finance and enablement teams.

For instance, maintain clarity and prevent errors through multi-level approval workflows, where reps approve commissions before the manager and finance sign-off, reducing disputes. Once the books are closed, locked plan data ensures that earnings are immutable, preventing overpayments. Giving reps access to an earnings dashboard, where they can see real-time earnings tied to each deal in HubSpot or Salesforce, further improves visibility.

Deal-level traceability allows reps to click into each payout to see the exact calculation logic behind their commission. In-app flags let reps flag a deal if something looks off, which notifies admins automatically.

Model and test the plan

Before rolling out your compensation plan, it’s critical to model and test how it will perform in real-world scenarios. This step helps you catch potential issues, avoid costly surprises, and ensure the plan is both motivating for reps and financially sustainable for the business. Without thorough testing, you risk overpaying on certain deals or creating incentives that don’t align with your sales goals.

Use plan performance modeling to forecast the costs of commissions across attainment bands before launch. This gives you a high-level view of how payouts scale for different performance levels. Run a scenario simulation to test the impact of paying higher on multi-year contracts on total commission expense, for example. This helps you understand how specific plan tweaks affect cost and behavior.

A blended rate analysis helps you understand the total cost of sale under different deal compositions. Historical back testing, where you apply new plans to last year’s data to estimate over and underpayment risk. These techniques give you confidence that the plan will perform as expected before it hits the field.

Communicate and roll out the plan

Even the best compensation plan will fall flat if it’s not clearly communicated. Reps need to understand how the plan works, how they earn commissions, and how to maximize their earnings. A thoughtful rollout ensures alignment, increases plan adoption, builds trust, and sets your team up for a strong start.

Rep training sessions, where you host a live walkthrough of the plan structure and earnings components are essential. To reinforce key details, use in-app tooltips and guides. Use a tool like QuotaPath to embed explainer text directly within each component to proactively answer reps’ plan questions.

Require e-signatures within QuotaPath so admins know who has reviewed their plan to streamline plan acknowledgment workflows. Keep the lines of communication open beyond launch. As you conduct quarterly comp reviews invite reps to give feedback, then refresh SPIFs as needed.

Track and optimize the plan

The sales compensation plan isn’t static. Ongoing tracking and optimization help determine what’s working, identify gaps, and make data-driven adjustments that improve both performance and cost-efficiency over time.

Attainment vs. quota dashboards allow you to view real-time rep performance versus goal to spot trends early. Forecasting pipelines enables reps to see how their pipeline mix impacts projected earnings, encouraging more strategic deal prioritization. Reporting on comp effectiveness shows leaders which components influence behavior and outcomes.

When it’s time to refine the plan, plan iteration and versioning allow you to easily clone, edit, and roll out updated plans mid-year. For data-driven optimization, use blended rate and attainment curve data to adjust next year’s plan. By consistently tracking and fine-tuning your comp plan, you ensure it continues to drive the right results at every growth stage.

Measuring the Success of Your Sales Compensation Plan

It’s essential to track the performance of incentive programs. Measuring success across key areas helps you understand what’s working, identify opportunities for improvement, and ensure the plan continues to drive the right outcomes over time.

1. Sales Performance
   Measuring overall sales performance helps you understand whether the plan is effectively driving revenue and goal attainment.
   – Revenue Growth: Track overall sales growth post-plan implementation.
   – Quota Attainment: % of reps hitting quota; compare across roles and tenure.
   – Deal Quality: Look for increases in multi-year, multi-product, or strategic deals.
   
2. Rep Productivity
   Rep activity levels and output reveal if the plan motivates efficient, high-impact work.
   – Pipeline Conversion: How efficiently pipeline turns into closed revenue.
   – Ramp Time: Time it takes new reps to reach full productivity.
   – Activity Metrics: Meetings booked, demos run, proposals sent.
   
3. Team Retention & Health
   Monitoring turnover and engagement helps ensure your plan supports long-term team stability and morale.
   – Rep Turnover: Changes in voluntary/involuntary turnover post-plan.
   – Promotions & Career Pathing: Are top performers staying and growing?
   
4. Operational Efficiency
   Assessing how smoothly the plan runs shows whether it’s scalable and manageable.
   – Commission Accuracy: Reduction in over/underpayment errors.
   – Admin Time Saved: Fewer hours spent calculating, reviewing, and approving commissions.
   
5. Rep Satisfaction
   Gathering rep feedback highlights whether the plan feels fair, transparent, and motivating from the field’s perspective.
   – Plan Clarity: Do reps understand how they’re paid? Run surveys or feedback sessions.
   – Team Morale: Use sales team NPS or pulse checks to gauge motivation and trust
   
6. Strategic Alignment
   Evaluating how well the plan supports broader company goals ensures it’s driving the right kind of sales.
   – Behavioral Impact: Is the comp plan incentivizing strategic revenue such as land-and-expand, upsells.
   – Forecast Accuracy: Are reps able to predict earnings based on pipeline?

Effective sales incentive programs require continuous optimization. Use the information and best practices we’ve discussed to build a sales compensation plan to increase sales team motivation and drive organizational objective achievement. 

Schedule time to learn about QuotaPath as a partner to create strategic comp plans and efficient payroll workflows.