Commission management is a critical component in an organization and relying on spreadsheets to handle it may become overwhelming. Without a thorough plan, most companies battle with poor performance which results in the inability to achieve their goals. Motivating and making it worthwhile for your sales representative will enhance the company’s gain.

Unfortunately, many companies make sales compensation faults and avoid putting best practices in place throughout the planning stage. These issues may not be obvious but will impact the company’s performance in the long run. To help your company avoid any mishaps here are 5 commission management mistakes with ways to recognize and avoid them.


  1. Low Variable Pay Proportion.

The commission is what drives sales and the whole point behind commission is to help motivate your staff to close significant deals. The take-home pay of the sales representatives will affect their overall performance. A low proportion of variable pay will not drive and inspire your salespeople the way you would want.

Without a good enough commission pay out, there will be nothing pushing your sales representatives to go a step further. To enhance overall performance levels, it is highly suggested to plan out a worthwhile percentage for your sales representatives to take home.

“The key to realizing a dream is to focus not on success but on significance — and then even the small steps and little victories along your path will take on greater meaning.” – Oprah Winfrey


  1. Mismatching Your Company’s Goals.

Sometimes even when your salespeople are meeting their targets it may result in a well-paid team that won’t meet the company’s goals. Issues may arise when the seller’s targets don’t meet the company’s priorities. A compensation plan that drives not just your salespeople but also your company forward will be more effective.

To create an effective plan, you will need to consider targets that will help the marketing and sales roles in the company. The commission is far more than closing deals and compensating sellers.

Developing an enabling environment will drive the business to fulfil both immediate and long-term growth objectives. It is important to keep your salespeople happy with their pay but not in a way that will result in the entire business suffering from a mismatch of company goals and sales initiatives.

“I had to make my own living and my own opportunity. But I made it! Don’t sit down and wait for the opportunities to come. Get up and make them.” – Madam C.J. Walker


  1. Not Implementing a Multiplier Style Compensation.

Having a commission rate that doesn’t change or multiply based on the sales representatives’ efforts will result in low performance. Having a commission rate that doesn’t meet their efforts shows the lack of growth for the person at hand.

Implementing a multiplier compensation style will help drive your sales representatives’ performances. The way to implement this style is to consider increasing their commission rate based on the deals they close. This helps motivate the sales representatives to sell above quota.

If the quota is impacting the company in a good way, then showing your appreciation will drive your sales team to do even better in the future. This will help avoid any issues arising from your staff and keep an overall happy team.

“The most difficult thing is the decision to act, the rest is merely tenacity. The fears are paper tigers. You can do anything you decided to do. You can act to change and control your life; and the procedure, the process, is its own reward.” – Amelia Earhart


  1. Not Adjusting Your Sales Commission Plan When Your Business Grows.

Building a commission plan can be challenging but keeping up with the pace of the market will help your business. Keeping up to date with the market will help make your sales representatives feel more valued. Also allowing your sales team to give feedback will help create a more effective commission plan.

Before going headfirst into a new plan, it is best for certain salespeople to understand the market price. One of the most basic steps to take when creating this plan is to include basic elements such as amendment, eligibility, philosophy, and payments.

Once gathering your new research and critical feedback it is best to start putting your new plan together by balancing the stakeholder and employee needs. Give yourself time to create the perfect plan that matches your business’s current level. Be sure to think through each decision before committing to it.

“For my part, I will never give up, and I mean never.” – Elon Musk


  1. Not Implementing a System like Commissionly.

When facing many common issues in your business it’s best to have software where you can access everything in one area. Implementing software will not only make your life easier but will help your sales representatives track their progress. This type of software will help find a solution that will evolve with the company.

Commissionly will also help you track unpaid commissions which will help the company avoid any uncertainty within the sales team. It provides many other features that can simplify most of the issues at hand. Taking away spreadsheets that can become a mix-up and implanting a simple system will benefit your overall business.

To avoid any problems in the future, implement a system, keep your sales team happy and your company’s overall performance levels at a high with Commissionly.

“Quality performance starts with a positive attitude.” – Jeffrey Gitomer


These are a few commission management mistakes you may face in your business. Implementing the given solutions will help create a better environment within not only your sales team but the entirety of the organization. Finding a system that will take away most of your management problems will result in less stress and happier employees.