This sales rep hit 215% of quota So his company cut his commission in half. 6 months later I placed him at a competitor. Yep. You read that right. He outperformed everyone on the team, brought in deals nobody thought were possible. And instead of celebrating, his leadership panicked. They told him they hadn't budgeted for that size payout and restructured his comp plan. They doubled his quota and halved his percentage per deal. So obviously, he started sandbagging deals and holding on to them until the next quarter. Because why close big in Q4 when it just hurts you in Q1? Unsurprisingly, he lost momentum. And so did the company. It's 6 months later, I've just placed him with one of their competitors. So here's your advance warning if you contemplate taking this approach: If your comp plan punishes over-performance, you're building a culture of mediocrity. Great reps will either game the system or leave. So when someone blows their number out of the water? Celebrate it. Pay them. And build a better budget. .
I have never in my life understood the phrase "That commission check is too big!" coming from management but I have heard it many times. As long as the comp structure ensures profitability per deal, how exactly can the commission (which is a part of the company's revenue earn on the deal) be too big?
Too often, companies don’t pressure test their plans for success. An overachieving rep should be a win for everyone. If the plan doesn’t allow for that, it is a management failure in planning.
I’ve also been on the wrong end of this short sighted thinking. It’s a small business mentality or arrogance that ultimately drives good talent away. sales in my experience has always been this 1- the company gets paid first 2-sales executive gets paid second. Big commission cheques = new sales growth and profit $$ for the company. Why punish success? It’s ego.
Lol, I wish this was a fairytale, but I’ve lived this twice. The funny part is everyone assumes it means the comp plan was broken, but my company had 40 years of history and still wasn’t ready for someone blowing the doors off. I hit seven times my quota before the year even started and they had no idea it was heading toward ten. They didn’t push me out because I failed. They pushed me out because the system wasn’t built for that level of growth. Here is what I learned. When a rep performs at that level it isn’t a threat. It is an opportunity. It is proof your market is bigger, your reach is stronger, and your ceiling is higher than you thought. Celebrate it. Pay it. Build around it. That is how you turn one breakout year into a breakout culture.
I've been this rep. Awful feeling. Brought in 50% of the team rev, made great money, thought everyone was happy. Got a new comp plan, cut the structure in half. Killed it again the next year. Got it cut twice in the same year. Stayed one year too long I guess. Loved my work.
That's well said! 👏 Companies truly benefit when they treat their top performers not just as employees, but as business partners. When you invest in them, trust their expertise, and give them a share in the success, it becomes a win-win scenario where both parties thrive.
With the profit he generated there was no need to change his compensation plan, what message does that send to the sales team?
Never Ever be afraid of paying a lot of commission to your reps. That just means they are accomplishing Company goals. Great Sales people work the sales plan to make the most money. Set it right and you are half way there. I left a company that had a plan that was too complicated and leveled out at peak performce.
It’s likely not even a budget problem. They don’t want to see all that money out the door. Looks better inside than out.
I have seen this scenario play out and the “A” players that experience it and move on tend to find companies that don’t do this, and that’s where the stay (at least until the comp plan changes in a negative direction). When I have been part of companies in support of true uncapped plans I saw reps who far exceeded quota, didn’t sandbag deals, and were highly self-accountable as they refused to slide backwards in pay each year.