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Introduction to Sales Commission Structure Can Reward The Wrong Behaviour
A sales commission structure is supposed to encourage better performance.
But what happens when it rewards the wrong behaviour?
Your salespeople might hit their numbers while discounting too heavily. They might chase easy deals instead of valuable opportunities. They could protect their own commission rather than help another salesperson. They may even prioritise short-term revenue at the expense of long-term customer relationships.
From the salesperson’s perspective, that behaviour can make complete sense. They are responding to the system the business created.
This is why sales leaders need to look beyond whether targets are being achieved. They need to understand how those results are being produced.
A good sales commission structure should support the sales strategy, encourage the right sales behaviours and reward outcomes that are genuinely valuable to the business.
If the incentives and the strategy are pulling in different directions, your sales team will eventually notice. And many will follow the money.
What Is A Sales Commission Structure?
A sales commission structure determines how salespeople earn variable pay from the sales they generate or the targets they achieve.
The exact model varies between organisations. Some salespeople earn a percentage of every sale. Others receive bonuses for hitting revenue targets, exceeding quotas, protecting margin, winning new customers or selling particular products.
Many businesses combine several measures.
On paper, this looks straightforward. Decide what you want the sales team to achieve and reward them for achieving it.
The difficulty is that people naturally pay attention to what is measured and rewarded.
If revenue is rewarded but margin is ignored, salespeople may have little financial reason to resist discounting. If new business attracts commission but account development does not, existing customers may receive less attention.
If individual performance is rewarded exclusively, collaboration between salespeople can become commercially inconvenient.
The sales commission structure therefore does more than calculate somebody’s pay. It sends a message about which activities and outcomes the organisation considers important.
That makes commission part of sales strategy, sales management and sales culture rather than simply a payroll calculation.
Why A Sales Commission Structure Can Change Sales Behaviour
Salespeople are constantly making choices about where to spend their time.
Which prospect should they call first? Which opportunity deserves another meeting? Should they hold the price or offer a discount? Should they involve a colleague? Should they pursue a difficult strategic account or close three easier deals?
A sales commission structure can influence every one of those decisions, including whether sales teams waste time on the wrong sales opportunities.
Harvard Business Review has examined how sales incentives can create unintended behaviours that damage both profitability and customer loyalty.
This does not mean commission itself is the problem.
The problem appears when the financial incentive encourages behaviour that conflicts with the wider sales strategy.
Imagine telling a sales team that value selling matters, while paying them purely on revenue regardless of discount level. Management is asking them to protect value, but the commission plan may reward getting the deal signed as quickly as possible.
Or imagine asking teams to collaborate while every opportunity has one individual owner and only that person receives the reward.
The organisation says one thing. The incentive says another.
When this happens repeatedly, the financial signal can become stronger than the management message.
This is also why corporate sales training cannot be viewed in isolation. You can improve sales skills, sales communication and consultative selling, but the surrounding management systems still need to support those behaviours.
Commission Can Encourage Sales Teams To Discount Too Much
Discounting is one of the clearest examples of incentives changing behaviour.
Suppose a salesperson earns commission based entirely on revenue booked.
A prospect hesitates at £20,000. The salesperson believes reducing the price to £18,000 will secure the deal today.
If their commission is hardly affected by the reduction, while losing the deal means earning nothing, the personal financial calculation is obvious.
Discounting becomes rational.
The business may dislike the behaviour. Sales managers may repeatedly tell the team to protect margin. Training may focus on value selling and premium pricing.
But if the sales commission structure still makes discounting the easiest route to commission, the business is sending mixed signals.
This can create a much bigger problem than lost margin.
Salespeople can gradually become less confident discussing value because price reduction becomes their safety net. Instead of improving sales communication, asking better questions and understanding the commercial impact of the customer’s problem, they learn that a lower number can rescue a difficult conversation.
Eventually you have a sales team relying on discounts and losing deals to cheaper competitors because customers have not understood the difference in value.
This is where corporate sales training and commission design need to support each other. Training can help salespeople explain value more clearly, while the reward structure should avoid encouraging them to abandon that approach at the first sign of resistance.
Revenue Targets Can Encourage The Wrong Deals
Not all revenue is equally valuable.
Some customers are profitable, strategically useful and likely to stay for years. Others require excessive support, demand constant discounts or create delivery problems that consume more resource than the initial sale justified.
A salesperson may know the difference.
But if the sales commission structure rewards every pound of revenue in exactly the same way, there may be little personal reason to care.
This can encourage salespeople to pursue opportunities that are easy to close rather than opportunities that are right for the business.
It can also create pressure near the end of a month, quarter or financial year. A salesperson who is close to target suddenly has a powerful reason to bring revenue forward.
That may result in unnecessary discounting, unrealistic delivery promises or deals being progressed before the customer is genuinely ready.
The sales figure looks healthy.
The operational consequences arrive later.
Sales leaders therefore need to distinguish between sales volume and sales effectiveness. A team can appear successful on a dashboard while creating poor-quality revenue behind the scenes.
Good sales training for teams helps salespeople qualify opportunities properly, understand customer problems and sell value. The commission model should reinforce those skills rather than rewarding any deal that happens to cross the line.
Individual Commission Can Damage Teamwork
Businesses often say they want collaborative sales teams.
They want salespeople sharing knowledge, helping colleagues, introducing specialists and working together on complex opportunities.
Then they create a commission system where only one person gets paid.
This can create predictable tension.
A salesperson may hesitate to bring a colleague into an opportunity if doing so creates uncertainty over ownership. Leads can be protected rather than shared. Customer knowledge may stay inside individual notebooks, inboxes or CRM accounts, creating a wider problem when sales teams hoard customer knowledge.
The behaviour is sometimes described as selfish.
But the sales commission structure may have made cooperation financially risky.
This becomes particularly damaging in B2B sales where several people may contribute to winning an account. A salesperson identifies the opportunity. A technical specialist develops the solution. An account manager understands the customer’s history. A sales manager helps shape the commercial approach.
Trying to pretend one person created the entire outcome can undermine the sales culture the organisation wants.
That does not necessarily mean everyone should receive equal commission. It means leaders need to think carefully about where individual accountability ends and genuine collaboration begins.
Sales team training can improve collaboration, consistency and sales communication, but leaders also need to remove financial reasons for employees to work against those principles.
Commission Can Shift Attention Away From The Customer
Customers do not care about your commission plan.
They care about making the right decision.
Problems appear when the salesperson’s financial priorities become more important than the customer’s buying process.
For example, a salesperson who needs one more deal to reach an accelerator may become unusually eager to close before month-end.
The customer has not suddenly become more ready. The salesperson has become more motivated.
This can change the sales conversation.
Questions become closing questions. Follow-up becomes more frequent. Genuine hesitation gets treated as an objection that needs overcoming.
The salesperson may start pushing for a decision rather than helping the buyer reach one.
A sales commission structure should never make customer pressure feel commercially necessary.
The strongest sales conversations help buyers understand their problem, recognise the value of solving it and reach their own informed conclusion. That is the foundation of consultative selling.
Good B2B sales training can teach salespeople how to ask better questions and create clearer conversations. But sales leadership must ensure the reward system does not encourage people to abandon those skills whenever a target deadline approaches.
Commission Does Not Fix Weak Sales Capability
When a sales team is underperforming, increasing incentives can appear to be a simple solution.
Offer more commission. Introduce a bonus. Run a short-term competition.
That may increase activity.
But it cannot automatically improve sales capability.
If salespeople struggle to explain value, an increased commission percentage does not teach them how to communicate value more clearly.
If sales conversations are not converting because the team asks weak questions, a bigger bonus does not improve questioning skills.
If the sales team lacks confidence discussing premium pricing, another incentive does not remove that capability gap.
This distinction matters.
Motivation and capability are different problems.
A salesperson can be highly motivated to win a deal and still lack the sales skills required to win it.
When management confuses the two, the sales commission structure can become the default solution to every performance problem.
Leaders should first diagnose why results are below expectation. Is the problem effort, opportunity quality, sales process, management, capability, communication or incentives?
The right response depends on the cause, which is one reason sales training ROI is difficult to measure when businesses do not define the behaviours and outcomes they expect to change.
Sales coaching for teams can help managers identify genuine skill gaps and develop the individual rather than assuming every performance issue needs another financial incentive.
Complex Commission Plans Can Create Confusion
Some commission plans become so complicated that salespeople struggle to predict what they will actually earn.
Different product percentages, thresholds, accelerators, margin rules, account classifications, bonuses and exceptions can all be added for understandable reasons.
Eventually, very few people understand the complete system.
This creates two problems.
First, the sales commission structure loses some of its ability to influence behaviour because people cannot easily connect an action with the reward.
Second, salespeople may concentrate on whichever parts they do understand.
If one product carries an obvious higher commission, it naturally attracts attention. If another strategic activity has a complicated quarterly calculation, its motivational impact may be far weaker.
Complexity can also damage trust.
Salespeople want to understand how their pay is calculated. Repeated disputes about commission, changing rules or unexpected deductions can quickly become a sales management distraction.
A useful test is simple: can a salesperson explain how the plan works without opening a spreadsheet?
If not, consider whether the complexity is genuinely necessary.
The aim is not to make every commission plan simplistic. Different sales roles and buying cycles require different approaches, particularly when sales team skills fall behind business changes. But the salesperson should understand which behaviours and outcomes matter and how those connect to their reward.
Sales Leaders Need To Look Beyond The Final Number
A revenue figure tells you what happened.
It does not always tell you how it happened.
Two salespeople could each generate £1 million of revenue while creating very different value for the business.
One might protect margin, develop profitable accounts and create long-term customer relationships.
The other might rely heavily on discounts, chase low-quality opportunities and create customers who become costly to support.
If the sales commission structure rewards both identically, the organisation may be ignoring behaviours that matter commercially.
This is why sales performance management needs more context than target attainment alone.
Useful indicators could include:
- Gross margin or contribution.
- New customer acquisition.
- Customer retention.
- Quality of opportunities.
- Average discount levels.
- Product or service mix.
- Strategic account development.
- Sales conversion rates.
- Sales cycle quality.
- Repeat and expansion business.
Not every measure belongs in the commission calculation.
Trying to pay commission against ten different metrics would probably create another problem.
But sales leadership should still understand these numbers.
Otherwise, management may celebrate target achievement while missing evidence that sales effectiveness is deteriorating underneath it, including hidden sales skills gaps inside growing teams.
How To Review Your Sales Commission Structure
You do not need to redesign commission every time somebody behaves badly.
But repeated patterns deserve attention.
Start by looking at what the sales commission structure currently rewards.
Not what the policy says it is intended to encourage. Look at what actually generates the biggest financial benefit for the salesperson.
Then compare that with your sales strategy.
Ask:
- Does the plan encourage profitable revenue?
- Does it support value selling or make discounting attractive?
- Does it reward the customers and products we strategically want?
- Does it encourage sensible qualification?
- Does it support collaboration where collaboration is necessary?
- Could salespeople increase earnings while behaving in ways we would dislike?
- Does the plan reward short-term activity at the expense of long-term value?
- Can salespeople understand the system easily?
The most revealing question may be this:
If you were a salesperson trying to maximise your earnings under the existing rules, what would you do?
That exercise can expose unintended incentives very quickly.
Then examine whether management behaviour supports the same priorities. There is little value changing commission if managers still celebrate revenue regardless of how it was won.
Sales leadership, sales coaching, sales process and incentives need to point in broadly the same direction, reducing dangerous sales team dependency on key employees.
When they do, salespeople receive a much clearer message about what good performance actually looks like.
Sales Commission Structure Should Support The Behaviour You Want
Commission is powerful because it turns business priorities into personal consequences.
That power needs to be used carefully.
A sales commission structure can encourage focus, activity and performance. It can also encourage discounting, opportunity hoarding, short-term decisions and poor customer behaviour if the incentives are badly aligned.
The answer is not necessarily to remove commission.
It is to make sure the system rewards outcomes that support the wider business.
If you want salespeople to sell value, do not make unnecessary discounting financially attractive.
If you want collaboration, do not make cooperation personally expensive.
If you want strategic customers, make sure easy low-value deals are not always more rewarding.
And if the sales team is struggling because of weak capability, do not expect commission to solve a training problem.
Effective sales communication training can improve how salespeople question, explain value and guide buying decisions. But those skills are far more likely to become consistent when sales management, coaching, process and incentives reinforce them.
Your salespeople will notice what the business rewards.
Make sure the behaviour your sales commission structure encourages is the behaviour you actually want.
Frequently Asked Questions About Sales Commission Structure
What is a sales commission structure?
A sales commission structure defines how variable pay is earned from sales performance. It may reward revenue, margin, new business, account growth or target achievement. For sales leaders, the important question is whether the structure supports the wider sales strategy. Poorly designed incentives can encourage behaviours that improve individual earnings while reducing profitability or sales effectiveness.
How can a sales commission structure affect sales behaviour?
A sales commission structure influences which opportunities salespeople prioritise and how they approach them. If commission rewards revenue regardless of margin, discounting may become attractive. If only individual results matter, collaboration can suffer. Effective sales management considers whether incentives reinforce consultative selling, value selling, customer outcomes and the sales behaviours needed for sustainable B2B performance.
Can sales commission encourage too much discounting?
Yes. When commission is based mainly on booked revenue, salespeople may have more to lose from missing a deal than from reducing the price. This can create a sales team relying on discounts rather than explaining value. Businesses should examine whether commission, sales coaching and value selling expectations are aligned instead of simply telling salespeople to protect margin.
Why do salespeople sometimes chase the wrong opportunities?
Salespeople often focus on opportunities that best match the way they are measured and rewarded. A commission model based purely on revenue can make easy, low-quality deals more attractive than strategic opportunities requiring greater effort. Better sales strategy combines sensible incentives with qualification, sales process discipline and clear sales management expectations about which opportunities genuinely create commercial value.
Can individual sales commission damage teamwork?
Individual commission can damage teamwork when helping a colleague creates uncertainty about ownership or earnings. Salespeople may protect leads, customer knowledge or opportunities rather than collaborate. Sales leadership should identify where individual accountability matters and where complex B2B sales require shared expertise. Commission rules should support the sales culture and collaboration the business expects from its team.
Should sales commission be based on revenue or profit?
There is no single model suitable for every organisation. Revenue commission is simple, but it can ignore margin and encourage discounting. Profit-based measures can improve commercial discipline but may be harder for salespeople to control or understand. The right sales commission structure depends on sales strategy, buying cycle, role responsibilities, pricing authority and the behaviours leadership wants to encourage.
Why isn’t increasing commission improving sales performance?
Higher commission increases the potential reward but does not automatically improve sales capability. A team struggling with questioning, objections, value selling or sales communication may be motivated but still lack the skills required to convert opportunities. Sales leaders should diagnose whether the problem is motivation, sales competency, process, coaching or opportunity quality before changing financial incentives.
How do you know if a sales commission structure is wrong?
Look for repeated behaviours that conflict with business goals. Excessive discounting, poor-quality deals, opportunity hoarding, end-of-quarter pressure and disputes over ownership can all be warning signs. Compare what your commission plan financially rewards with your sales strategy. If salespeople can maximise earnings while behaving in ways management dislikes, the structure deserves closer examination.
How can sales leaders stop salespeople discounting too much?
Start by understanding why discounting happens. Weak value communication, poor confidence and pricing pressure may require sales coaching, while the commission system may also make discounting financially attractive. Leaders should align pricing authority, incentives and value selling skills. Simply telling a sales team to hold price rarely works if the wider sales process rewards closing quickly at almost any margin.
Can commission replace sales training?
No. Commission can increase motivation, but it cannot teach salespeople how to ask better questions, handle objections or explain value clearly. If sales conversations are not converting because capability is weak, increasing the financial reward does not fix the underlying problem. Effective sales improvement combines appropriate incentives with coaching, sales methodology, management reinforcement and practical skill development.
How should commission support consultative selling?
Consultative selling requires salespeople to understand customer problems before recommending a solution. Commission should avoid creating pressure to rush opportunities, force unsuitable products or prioritise short-term revenue. A well-designed sales commission structure supports commercially valuable outcomes while giving salespeople enough freedom to qualify properly, build buyer confidence and create sales conversations centred on genuine customer needs.
How often should a sales commission structure be reviewed?
Sales leaders should review commission whenever strategy, products, pricing, territories or sales roles change materially, as well as through regular performance reviews. The aim is not constant redesign. It is to identify whether incentives still support current priorities. Historical commission plans can create unwanted behaviour when the business has changed but its reward system has remained the same.
What should sales leaders measure alongside commission?
Revenue alone rarely gives the complete picture. Depending on the business, leaders may also monitor margin, conversion rates, discount levels, new business, retention, sales cycle quality and account growth. Not every metric needs to affect commission. However, broader sales performance data helps management understand whether targets are being achieved through healthy, repeatable and commercially valuable sales behaviour.
Does sales commission affect sales culture?
Yes. The reward system tells employees which outcomes the organisation values most. If individual revenue dominates every other consideration, teamwork, customer experience and long-term account development may receive less attention. Sales culture is shaped by management behaviour, coaching, targets and incentives together. Commission therefore needs to reinforce rather than contradict the behaviours leaders say they expect.
What makes a good sales commission structure?
A good sales commission structure is clear, understandable and aligned with the company’s sales strategy. It rewards outcomes salespeople can influence without creating obvious reasons to discount unnecessarily, chase unsuitable opportunities or compete with colleagues. The strongest structures work alongside good sales management, realistic targets, effective coaching and a repeatable sales process that supports sustainable performance.
Our B2B sales training helps businesses build more confident, consistent, and effective sales teams. We deliver corporate sales programmes, team sales training, and practical corporate sales coaching designed around the challenges your organisation faces.Our approach helps businesses communicate value more clearly, reduce buyer confusion, and improve conversion rates. We work with companies across the UK looking to strengthen sales performance through better conversations.
More sales training insights
- Sales Performance Problems Your Team Won’t Tell You About
- Sales Admin Overload Is Stealing Your Team’s Selling Time
- Sales Manager Workload: Why Managers Become Too Busy
- Sales Capacity Planning: Why Teams Run Out Of Capacity
- Sales Process Exceptions That Destroy Consistency
- Sales Role Clarity: Why Unclear Roles Cost Sales
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