Approaches to Commission Pay for New Sales Reps: Share Your Thoughts

What is your approach to commission pay for sales reps in their first and second months? Should companies offer ramp-up support: yes or no? 1. Pay full commission, even if they did not meet their targets. 2. Pay a percentage, such as 80% of the commission, even if they haven't met their targets. 3. Do not pay any commission without performance. Thoughts on this?

9 comments

Nicholas P.
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Yes - and the length depends on the length of the sale cycle. If your sale cycle isn’t 1-2 months it should be longer. Be realistic I believe 2 is pretty standard as long as you have a plan with accelerators so it incentives reps more.
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Pat H.
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When I was at HubSpot I was paid my full for 3 months, and then it ramped down for a number of months until I was on my own. It was a huge motivator to produce and keep earning that check. That said, their capacity model and bank accounts were for now flush than most smaller companies, so they could do that. I think a month at full, 2 at 80% for the first quarter will give a rep support while also motivating them to earn when the training wheels come off.
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Jared R.
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I think a good middle ground is to give a smaller (50% or less) quota for the ramp period and allow reps to get paid out the same as if it was 100% if hit is a realistic motivator to get points on the board, while understanding they won't be at full tilt (so to speak) until after ramp
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Jared R.
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Ryan M. what are you seeing?
Jared R.
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Colin S.
Jared R.
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Dale Z. Adam J.
Emerson M.
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I go with a ramp quota that's achievable to hit 100%, pay out their commission equivalent to if they were fully ramp, but I do not allow for accelerators until the ramp period is over.
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Ryan M.
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Sara B. -- we just released a great report on ramping comp plan best practices here: https://www.quotapath.com/resource/q2-ramping-comp-plans-report/ Also a ramp calculator that could be helpful: https://www.quotapath.com/ramp-calculator-sales/
Jack O.
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My hot take is first quarter guaranteed, but yes, it also depends on the sales cycle. Ryan M. appreciate the report, and I downloaded it. However, I think the key insights on page 2 pretty much answers Sara’s question 🙂

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