How to Design a Comp Plan That Actually Motivates Reps

A good sales comp plan is like a lever—it should pull reps toward the right behaviors. But too often, comp plans are either too simple to drive results or so complex no one understands them.

Here’s how to design one that actually works.

1. Align to Business Goals First

Before you touch a spreadsheet, ask: what are we trying to drive?

  • New revenue? Renewals? Expansion?

  • Specific product lines or geographies?

  • Multiyear contracts? Higher margin deals?

The comp plan should reflect the outcomes that matter most.

2. Keep the Formula Simple

The best comp plans can be explained in under a minute. Ideally:

  • 1–2 variables (e.g. new ARR, renewals)

  • Clear accelerators or thresholds

  • No black-box math or endless exceptions

If reps can’t tell how they’re getting paid, it’s not a motivator—it’s a mystery.

3. Pay for What You Can Measure

Don’t comp on metrics you can’t reliably track. Examples of clean metrics:

  • Closed-won ARR

  • Deals signed by date

  • Retained revenue at 90 days

Avoid vague KPIs like “customer satisfaction” unless tied to a clear input and consistent data.

4. Include Guardrails and Floors

Protect the business with things like:

  • Clawbacks for churned deals

  • Minimums for accelerators to kick in

  • Payout caps if budget is a concern

Smart guardrails protect both cash flow and fairness.

5. Test It Before You Roll It Out

Run real scenarios through the new model:

  • What happens if a rep kills it?

  • What if they sandbag?

  • What if a deal spans quarters?

You’ll find bugs, edge cases, or unintended outcomes that you can fix before rollout.

6. Communicate It Clearly (and Often)

You need reps to trust the plan. That means:

  • Documenting it in plain language

  • Holding a live walkthrough session

  • Offering 1:1 follow-ups if needed

The more transparent the plan, the more it will motivate.

Final Thoughts

A comp plan is only as good as your reps’ ability to understand and believe in it. Keep it simple, fair, aligned, and tested—and it will drive the behaviors you want to see.

Want help building your next plan? Let’s talk.

Eric Huebner