This trend in sales compensation evolved in 2024 to incorporate increased market complexity, technological advancements and shifts in employee expectations. Companies begin to realise that pay-for-performance incentive plans and compensation models that were effective in the past were no longer producing the intended results. This shift ushered in the need for more agile, data-driven and sellers-centric approaches.
Another big trend was anchoring compensation planning with data and AI insights. Sales leaders are using AI tools to both predict performance and underpin personalised compensation plans. For instance, a SaaS player leveraged AI-driven tools to track performance metrics and market shifts that helped them adjust targets and commissions to avoid any misalignment with the changing market. The result was a 20 per cent improvement in quota attainment, along with better allocation of capacity to high-propensity deals.
Second, flexibility in plan design was important. While the customary business approach was for all plans to run on an annual basis, the companies interviewed in 2024 had switched to flexible, quarterly or even monthly plans to address evolving marketplaces. One retailer organisation switched to a quarterly incentive model, both encouraging reps to achieve the sales revenue goals and providing drivers toward the quality of customer feedback and retention. The company was able to improve customer sentiment by 15 per cent while maintaining a high level of sales rep engagement.
Another big change: recognition of employee wellbeing as integral to sales compensation. Larger incentives and small perquisites to encourage healthy behaviours or to contribute towards a sense of wellbeing were also on the list. A global tech company offered well-being bonuses based on work-life balance, achieving a 30 per cent reduction in self-reported burnout and a 20 per cent rise in retention rates. Remarkably – and critically – those organisations that were able to respond to these changes by leveraging AI, embracing a ‘total compensation’ model and prioritising the wellbeing of employees experienced increased performance, engagement and growth. As the example of the evolution of sales compensation in 2024 illustrates, a smart, responsive and human-focused approach to talent is becoming the norm.
