Sales compensation programs have historically followed one fundamental rule. In order to drive desired outcomes, simply reward those outcomes. Annual quotas, quarterly bonuses and commission checks have long been the currency for sales motivation. While these programs are certainly not going away, new challenges facing modern sellers are making many of these plans less effective
Most incentive plans sit through countless reviews prior to launch. Finance reviews validate cost. HR reviews hammer out governance. Sales leadership reviews quotas and payout structures. RevOps spends countless hours on implementation. Despite all of this time and effort from multiple functions, plans still fail to achieve desired business outcomes. Why? Because organizations mistake approval
Why Annual Incentive Plans Don’t Work in Today’s Revenue Landscape Annual incentive plans have been the cornerstone of sales compensation for generations of sales leaders. Every year, companies spend months designing compensation plans, setting quotas to hit annual revenue targets, then crossing fingers that the new plan works. For much of the last century, this
The majority of sales compensation plans being deployed today were built for a workforce that thinks, sells, and makes decisions far differently than the incoming generation of sellers. Legacy plans were designed to incentivize long-term loyalty, tolerate delayed commissions, endure highly aggressive competition, and thrive in pressure-hustle cultures. Enter Generation Z and Generation Alpha. Younger
