3 Quick Principles to Sales Compensation

Your sales compensation plan isn’t just a payroll tool.

It is one of the clearest signals of where your company actually places value.

When designed well, it sharpens salesperson focus and fuels company growth.
When it’s not, it creates confusion, frustration, and misalignment across your revenue team.

After working on enough plans—and cleaning up enough broken ones—there are a few principles I consistently come back to.

1. Alignment Beats Everything

If the business is prioritizing long-term customer value, but the comp plan only rewards short-term revenue, you’ve already missed the boat.

Want better retention?
Want multi-year deals?
Want expansion?

Then you must pay for those behaviors.

Your compensation plan should make the best outcome for the salesperson match the best outcome for the business. When those two things diverge, incentives start pulling in different directions—and that’s when problems begin.

2. Simplicity and Transparency Build Trust

If a rep needs to spend a day trying to understand their commission check, something is broken.

And once trust erodes, motivation follows quickly.

I’m a strong believer in keeping plans simple—one to two core metrics, and certainly no more than three. The more complicated the formula, the less likely it is to drive the behavior you actually want.

Clear plans.
Clear statements.
Clear visibility into payouts.

That’s where trust comes from.

3. Pay Mix Should Match Role Expectations

Not every sales role should have the same salary-to-variable structure.

If someone has strong control over outcomes, you can lean more heavily into commission.

If their influence is partial—or if the sales cycle runs 12–18 months—stability matters more. You can’t hire someone into a long-cycle enterprise role and expect them to thrive without an appropriate pay mix, often closer to 50/50.

Compensation should reflect what someone can realistically control—not what you’ve always done in the past.

The Takeaway

Sales compensation is not “set it and forget it.”

Just because a plan worked yesterday doesn’t mean it still aligns with today’s strategy.

It requires intentional design, disciplined execution, and regular review. Without that, plans drift. And when they drift, behavior follows.

If you’re unsure whether your plan is reinforcing the right behaviors, it’s worth asking a few honest questions:

Is your current plan rewarding what you truly want more of?

Are you certain it’s your sales team that isn’t performing—or is it the carrot that’s pointed in the wrong direction?