The right incentive structure motivates employees, reflects your industry dynamics, and drives success in the metrics that matter most to your company. The sales team is your company’s motor, so it’s important to make sure they are happy and on track to achieving their – and your – goals.

Does creating a sales comp plan seem complicated, challenging, or formulaic? It doesn’t have to be.

“12 Steps To Designing a Successful Sales Compensation Plan” is an insightful guide by SalesGlobe’s Mark Donnolo, breaking down exactly how to go about creating an incentive program that works. We recommend giving it a read, but here are what we found to be the key takeaways:

Financial Importance

Sales compensation plans greatly impact a company’s overall performance. Also, they often represent one of the firm’s greatest expenses. Be thoughtful when you are setting the target pay for each position and the pay mix. Everything flows from there.

Target Pay

Research the salaries offered by competitors and industry labor standards. Keep in mind that you may have valid reason to offer higher or lower thresholds.

Pay Mix

This is the proportion of base salary to bonuses, if all goals are achieved. The pay mix determines the Target Total Compensation (TTC), i.e. salary plus incentives.


Part of creating a compensation plan is establishing an upside potential (cap) and performance thresholds (minimum requirements for payout). Higher potential incentives are enticing, but can be costly if you promise more than is financially prudent to pay. Consider your employees’ motivations and strike the right balance. And don’t forget about non-monetary rewards! Sometimes they provide more value than cash, at a lower cost to you.


The best plans include rewards that your employees desire, encourage quantifiable results, and represent your corporate values. Perhaps the incentive can even be used to further enhance an employee’s performance, such as the latest iPhone. Alignment includes developing performance measures that highlight priorities and strategies for each role, going beyond the basic expectations of the job description. Interpersonal collaboration, between the sales staff, management, and support, is another vital element.


Set performance tracking levels (local or regional?) and timing (monthly or quarterly?). Decide how you will formulate design mechanics: how performance translates into pay. While there are countless options and nuances, the three main approaches are:

  • Rate-based (commission)
  • Quota-based (targets/goals, often with scaled payouts)
  • Or, a blend of multiple mechanics or measures

Operational Excellence

Employees should be able to trust and rely on any system, platform, or technology you use, otherwise it will be rendered ineffective. This starts with the communication and roll-out, extending through daily operations and the program evaluations.

Ask questions

Institute a governance process to make sure the plan is fair and regularly evaluated. Never accept the status quo with something this important. Can the current plan be simpler? Less expensive? Does it represent your business objectives? Reward top performers, or penalize them in any way?

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At IncentViz, we love collaborating with clients to assess their current sales approach, understand their big-picture goals and optimize the incentive structure accordingly. IncentViz is our customizable, user-friendly solution for incentive plans designed to encourage sales behavior that improves KPIs. At the end of the day, we aim to provide a seamless platform that reflects your top priorities and boosts your bottom line.

Ready to learn more? We’re happy to set up a demo and discuss how IncentViz could work for you.