Sales Performance Management Best Practices Blog

Meeting the Sales Compensation plan design challenge of 2020/2021

Posted by Jerry Hegarty on Tue, Dec 15, 2020 @ 14:12 PM

2020 is what it is. The reality that many managers are facing is revising their compensation plans for 2021 to maintain motivation within their sales teams during these challenging times. With all this pressure, the following videos - presented in a laser focused 2 minute format - remind us that despite the craziness going on in the world right now, focusing on the basics are what will set the stage for growth as life begins to normalize.

When it comes to setting up your 2021 Sales Compensation plans for success, simplicity is - and always has been - the secret sauce that separates good plans from great plans. Two tips are highlighted to help keep our focus

  • Index card test, make the plan simple enough that you can present it and explain it clearly on an index card.
    • Limit the number of variables and moving parts in your plan (Plan Measures).
  • Balance is the key; Simple and imperfect is often better than complicated and perfect


With these objectives fresh in our mind, the following review of core elements of a common sales comp plan are easily conveyed here in just a few minutes.

  • Never underestimate the importance of the KISS principle
    • Limit your plan Plan Measures to no more than two or three more here.
  • Peters guidance on setting up plan basics taps into his direct experience leading growing sales teams in the high tech world. While you may work in a different industry with profit margins that are different than what he calls upon during his recommendations, His thoughts on the set up of plan basics (OTE, Base Pay & Variable Pay, Caps,  Accelerators , Tiered Performance Rewards more here are best practice level concepts.

Many thanks to Peter Levine for the above video’s. Peter is a former CEO and software engineer (Citrix, XenSource, VERITAS, etc.), board member of GitHub (recently acquired by Microsoft), lecturer in management at the Stanford Graduate School of Business and a general partner at Andreessen Horowitz (

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Topics: Sales Comp Plan Fundamentals, Microsoft Teams