Sales Comp: Ask Not What You Are Paying But What You Are Paying For

If your sales compensation plan was designed five years ago, is it rewarding the behaviors that create value today or the behaviors that used to create value? Many organizations are trying to drive profitability, retention, customer experience and collaboration while continuing to reward sellers almost exclusively for bookings. The result is often predictable: Employees optimize for what gets paid rather than what creates long-term value.

A Sales Motion That Has Changed

Many business-to-business sales environments have become more complex, with larger deals, longer buying cycles and success increasingly dependent on coordination across sales, product, customer success and leadership. Traditional commission and goal-based incentive structures remain important, but organizations are re-evaluating whether they fully reflect how value is created today.

The crux: Sales is still the foundation of sales compensation, but it is no longer the full story.

The Decline of Pure Commission Plans

Based on three years of WTW Sales Compensation and Design Survey data, the consulting firm observed that commission prevalence declined by approximately 35% across roles.

Pure commission plans can become problematic when sales outcomes depend on multiple contributors, complex solutions, long buying cycles and retention responsibilities. They may over-reward individual closers while encouraging short-term behaviors such as excessive discounting or premature deal closure.

The issue isn’t that commission is ineffective. Rather, concentrating incentives on commission alone can unintentionally reward behaviors that undermine enterprise objectives. In many organizations, compensation problems are actually behavior problems.

The Rise of Strategic and Hybrid Incentives

The trend is similar for goal-based incentives, which declined by approximately 27% as organizations expanded the use of hybrid and discretionary plan elements.

Organizations aren’t abandoning performance-based pay — they are redesigning it. Revenue remains the anchor, but it is increasingly supplemented by profitability, customer satisfaction, product mix and strategic objectives.

The future of sales compensation isn’t more pay for performance. In many cases, it’s better pay for performance. Also, the question is no longer whether organizations reward performance, but whether they reward the right performance.

Real-World Factors Driving the Case for Change

Consider a company that compensates salespeople primarily on bookings while simultaneously asking them to improve customer retention and profitability. It may find itself paying employees to maximize one objective while expecting different outcomes. When metrics and incentives are misaligned, sellers frequently behave exactly as the plan encourages.

At the same time, artificial intelligence-assisted selling, digital buying channels and customer success functions are changing how revenue is generated. As portions of the traditional sales process become automated, sales compensation plans should increasingly account for the activities that create differentiated value: relationship development, solution design, account growth and cross-functional collaboration.

Together, these realities create a clear case for change: Organizations need incentive plans that reinforce not only what gets sold, but how value is created, protected and expanded over time.

A Stable Foundation: Role-Based Differentiation

According to the WTW survey data, sales revenue remains the primary performance metric for more than 70% of roles, reinforcing that while roles and plan designs evolve, revenue continues to serve as the anchor of sales compensation.

Despite these changes, role differentiation remains a stable foundation of compensation design. Hunters, farmers, hybrids, specialists and managers (the five archetypes of salespeople) continue to play distinct roles with different value propositions and compensation structures:

New business roles generally carry higher variable pay and stronger leverage;
Account management roles emphasize retention and relationship continuity;
Hybrid roles balance acquisition and growth; and,
Technical or support roles rely more on structured goals and lower variable pay.

The Complexity Trap

As organizations add more performance measures, complexity can become a real risk. Additional components may reduce transparency, weaken line of sight between effort and reward, increase administrative burden, and create perceptions of subjectivity.

Adding another measure doesn’t automatically make a plan more strategic. In many cases, it simply makes it harder for employees to understand how to win.

So, the goal is better alignment, not more complexity.

The most effective organizations introduce enough flexibility to reflect real-world business dynamics while maintaining simplicity, clarity and strong communication.

Five Questions Every Leader Should Ask

With all this said, consider the following questions:

Does your plan reward individual achievement, enterprise value or both?
Are you paying for revenue, profitability, retention or some combination of these outcomes?
Can every participant clearly explain how incentive payouts are earned?
Are you rewarding collaboration when success requires teamwork?
What behaviors would disappear tomorrow if your incentive plan changed?

Looking Ahead

The future calls for integrating traditional and modern approaches, not choosing between them. Commission, quotas and revenue metrics will continue to play a central role, but they increasingly will sit within broader frameworks that account for strategy, behavior, collaboration and long-term value.

Organizations that succeed likely will balance simplicity and sophistication, consistency and flexibility, and performance and behavior. Their plans will pay for results and shape how those results are achieved.

Editor’s Note: Additional Content

For more information and resources related to this article, see the pages below, which offer quick access to all WorldatWork content on these topics: