Sales Commission Structure mistakes Sales Ops Should Avoid

Sales commission structures are one of the most potent behaviour altering levers in the Sales Operations playbook. The right incentives can motivate exceptional performance, drive revenue, and retain top talent. And yet, despite well-meaning intentions and significant investment, many organizations experience underwhelming commission plan outcomes less due to bad strategy and more due to invisible ingredients lurking in the architecture of their plan design. These hidden blind spots often rear their heads later in the form of disputes, delayed payouts, misaligned behaviours, or eroded trust between salespeople and leadership teams. In this article, we’ll explore some of the most common blind spots in sales commission structure, why they matter, and how to help your Sales Ops team sidestep common pitfalls.

No Clear Line of Sight from Performance to Payout

It should be possible for a salesperson to reasonably estimate how their effort and behaviours, performance, and final payout all connect. Without that clarity, plans may create the wrong incentives and erode trust. One of the most overlooked ingredients in a good commission plan is clear, consistent, and easy-to-understand communication of how performance maps to payout.

Why this is overlooked

Sales Ops often writes plans under the assumption that sales reps will “figure it out,” or that the managers will serve as interpreters of the rules.

Example

A well-intentioned plan may have several accelerators, decelerators, and quarterly true-ups to drive and protect performance. However, if the payout formula is buried in several pages of hard-to-read language or calculations, reps can’t easily know or estimate how much they will earn mid-quarter and may give up.

What to avoid If a top performer has to dig through several pages of calculations, terminology, and exceptions to know their pay, that’s a plan that is too complicated.

Missing or Wrong Behavioral Incentives

Sales commission plans almost universally reward outcomes. However, not all behaviors are created equal, and not all actions that lead to desired performance are equally sustainable.

Why this is overlooked

Plans are almost always designed backward from revenue or quota targets, not forward from desired sales behaviors.

Example

A plan may heavily reward the closure of new logos without recognition of deal quality or pipeline balance. As a result, reps may close low-margin or low-potential deals to hit targets. Or they may oversell capabilities to close a deal and hand off to a low-touch customer success team, causing downstream churn and margin erosion.

What to avoid

Avoid commission plans that look exclusively at “what closed” instead of “how it closed.” If your top performers can easily game the system by focusing on short-term growth in unprofitable ways, that’s a problem.

Plan Designs that Rely on Only One Metric

Sales commission structures frequently use one (and only one) metric to drive commissionable performance, such as revenue, bookings, quota attainment, etc.

Why this is overlooked

Plans that use one metric are easier to explain, easier to administer, and easier to automate, as most CRMs come with standard commission calculation capabilities.

Example

A plan using only revenue or bookings incentivizes reps to discount at the last minute to hit quota, or to hit quota on a deal just to collect the payout. As a result, commissions come at the expense of profitability and deal quality.

What to avoid

Over-simplification to the point of missing margin, deal mix, product focus, or strategic priorities.

Ignoring Exceptions and Edge Cases

Sales commission disputes don’t usually happen for the standard scenarios of closed deals and earned commissions. The vast majority of disputes and exceptions to standard plans occur for exceptions—splits, overlays, territory transfers, role transitions, retroactive amendments, and more.

Why this is overlooked

Sales Ops plans and designs only for the “happy path” and underestimates or misjudges the number of exceptions.

Example

A representative transitions territory or splits the book with another rep halfway through a quarter. But the commission plan has no clear guidance or process for handling pipeline carryover or quota proration, so the system doesn’t know what to do and requires manual overrides.

What to avoid

Sales Ops knows their plan is confusing when they have to react to every exception instead of building an operable process and then executing against it.

Plan Operability/Sustainability Ignored in the Design

A commission plan on paper, in a spreadsheet, or in a financial model may look very different when it comes time to actually operate the plan.

Why this is overlooked

Plan design and plan operations are often siloed and don’t consider or integrate limitations of systems or administrative capacity.

Example

An otherwise well-intentioned plan has several tiers, rates, and other exceptions based on products, regions, customers, and more. However, the combinations and nested exceptions require heavy manual intervention every month and result in commission payouts delayed for weeks or months.

What to avoid

Plans that can’t scale as the sales organization evolves or expands.

Sales – Finance -HR – Alignment

Sales commission plans are often a sport of dysfunction that only hurts employee engagement and retention when different departments are not aligned from the get-go.

Why this is overlooked

Sales Ops has the primary motivation of driving performance, Finance has primary concern for cost control and accuracy, and HR deals with things like recruiting, compensation, and legal compliance.

Example

Sales Ops motivates reps to close aggressively to drive growth and quota attainment. Finance later retroactively caps or overwrites payouts due to overspending against the annual budget.

What to avoid

Plans that are great at motivation but can’t be supported or sustained by Finance and HR.

Missing/Weak Feedback Loops or Plan Reviews

Sales commission plans are often created and then forgotten until the next planning cycle. Or changes are made, but plans are treated as “set-and-forget” assets in your sales tech stack.

Why this is overlooked

Making changes to commission plans mid-year is often seen as disruptive or too risky to do.

Example

Market or strategic conditions change, but the plan does not respond, continuing to incentivize legacy products or undesired segments or geographies.

What to avoid

Plans that have no built-in feedback, performance diagnostics, and periodic data-driven iteration.

Conclusion

Sales commission structures don’t fail due to a lack of will or resources by Sales Ops. The hidden and often overlooked structural ingredients often embedded deep in the plan design. Clarity, behavioral alignment, scalability, exception handling, and cross-functional alignment are not “nice to have” features of a commission plan. They are prerequisites.

By anticipating and proactively surfacing these blind spots early in the design process, Sales Operations teams can move from merely administering commissions to proactively shaping sales performance, trust, and long-term growth.