How to Design & Implement Your Sales Commission Plan

The difference between a good sales team and a great one often comes down to how they’re paid. But commission plans fail more often than they succeed, not because businesses don’t want to reward performance, but because structures are either misaligned, overly complex, or unsustainable.

At Employmate, we’ve helped organisations across the globe design commission frameworks that motivate salespeople and protect business growth. Here’s the proven approach we seen the most success with.

Step 1: Define Clear Objectives

Every commission plan should start with one question: what behaviours do we want to drive?

• New customer acquisition

• Long-term account retention

• Profitability over revenue

• Faster deal cycles

👉 If you’re unsure where to start, take our Quiz to see which approach fits your team.

Step 2: Align With Role and Market

Different roles, territories, and industries require different models.

• Multi-Metric Approaches: Combine revenue, margin, and retention.

• Geographic Adjustments: Higher rates for tough territories.

• Career Progression: Ramp-up periods for new hires, tiered structures for seniors.

Employmate Insight: One of the biggest mistakes we see is applying a “flat” model across all roles. This causes SDRs to churn and enterprise managers to disengage mid-cycle.

Step 3: Keep It Simple and Transparent

A commission plan that no one understands won’t motivate anyone.

• Write terms in plain English

• Train sales teams on calculations

• Give visibility with dashboards

• Review quarterly and adjust for market conditions

Employmate Insight: Complexity doesn’t drive performance, clarity does.

Step 4: Avoid Common Pitfalls

We see the same mistakes repeated across industries:

• Over-complexity: Too many variables confuse staff

• Unrealistic quotas: Kill motivation before sales begin

• Inconsistent rules: Lead to mistrust

• Delayed payments: Damage retention more than low commission percentages

Step 5: Track the Right KPIs

Measuring success is as important as design.

• Revenue vs. quota attainment

• Average deal size and sales cycle length

• Retention rates by account type

• Cost of sale vs. revenue contribution

• Profit margin protection

Emerging Trends We’re Tracking

The future of commission structures is shifting:

• Customer Success Alignment: Commissions tied to renewals, product adoption, and lifetime value

• Team-Based Rewards: SDR/AE/AM pods with shared incentives

• AI-Driven Plans: Data-led quotas and territory optimisation

• Sustainability Bonuses: Incentives tied to ESG and diversity outcomes

Employmate Insight: Businesses that adopt these early will win top talent and outpace competitors.

Final Takeaway

A commission plan isn’t just payroll, it’s a growth engine. Designed well, it motivates salespeople, retains high performers, and drives predictable revenue.