Commission Vs Incentives which is better?

In sales compensation, there is one misunderstanding that quietly undermines performance, strategy, and revenue focus inside organizations everywhere: the belief that a commission plan and an incentive plan are the same thing.

They are not. And the difference between the two is far more significant than most leaders realize.

This video breaks down, in under one minute, the dramatic and strategic difference between a Commission Plan and an Incentive Plan—and why forward-thinking revenue organizations must rethink how they pay sales teams in 2025 and beyond.

⭐ Why this matters

Revenue organizations today operate in a high-pressure, highly disrupted environment. New product launches, subscription models, margin pressure, customer churn, and economic unpredictability have reshaped how commercial teams need to drive results.

Yet most companies are still compensating their sales teams using a structure designed 40+ years ago.

A Commission Plan pays for selling.
But an Incentive Plan pays for selling with intent.

That distinction is everything.

⭐ Commission Plans: What they really do

Commission Plans are transactional by nature.
They reward a simple output: sell more, earn more.
They are volume-focused.
Deal-focused.
Outcome-focused.

They give reps a direct percentage of revenue or profit, based purely on closed business.

They are easy to understand.
Easy to administer.
And often… dangerously simplistic.

Commission Plans fuel sales activity.
But they rarely shape strategic behavior.

⭐ Incentive Plans: What they unlock

Incentive Plans are purpose-driven.
They intentionally connect compensation to business priorities, not just volume.

They guide the how, not just the how much.

Incentive Plans allow organizations to influence:

✓ growth categories
✓ strategic products
✓ profitability
✓ renewal behavior
✓ cross-sell
✓ upsell
✓ pipeline quality
✓ customer retention
✓ logo acquisition
✓ sales discipline

This is compensation as a steering mechanism—not merely a payout engine.

Incentive Plans fuel transformation.

⭐ Why this distinction is critical for CXOs

If leadership wants to shape behavior…
If the business has priorities beyond pure revenue…
If the market is shifting…

Then commission alone cannot drive the outcomes needed.

Commission plans create motion.
Incentive plans create alignment, momentum, and intention.

This video helps leaders recognize that truth clearly.

⭐ Who this video is for

This short video is designed for:

• Chief Revenue Officers
• Sales Leaders
• Sales Operations teams
• Revenue Operations leaders
• CFOs and Finance teams
• HR Compensation leaders
• Board members
• Founders and CEOs
• GTM transformation teams

It delivers a concise, thought-provoking explanation that reframes how organizations think about sales compensation design.

⭐ What you’ll walk away understanding

By the end of this video, you’ll know:

• Why commission plans reward output, not impact
• What makes incentive plans a strategic leadership tool
• How compensation influences behavior
• Why commission models alone break alignment
• Why incentive plans are essential for modern revenue strategy
• The behavioral psychology behind incentive design

⭐ Final thought

If a company wants sales, commission is enough.
If a company wants strategic selling, strategic movement, and strategic outcomes…

Incentives must lead.