Incentive Design

Every comp plan creates incentives. The question is whether you designed them deliberately or discovered them after the damage. Most sales compensation plans pay for outcomes — bookings, revenue, new logos — without interrogating the behaviours those payments actually produce. The plan rewards closing deals, so reps close easy ones and avoid complex ones. It rewards new business, so reps oversell to hit the number and leave retention to someone else. It has cliff accelerators, so reps sandbag deals across period boundaries. These are not surprises. They are the predictable consequences of incentive structures that were never stress-tested.

The comp plan is the single most powerful lever a revenue organisation has for shaping seller behaviour, and most organisations design it in a spreadsheet over two weeks in December. The result is a plan that optimises for what finance can model, not for what the business actually needs. Then the organisation spends twelve months managing around the unintended consequences.

The answers below diagnose the specific ways comp plans misfire and explain how to audit your incentive structure for the behaviours it is actually paying for.